Edgar Filing: General Motors Co

GM 2014 10K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549-1004

Form 10-K



þ	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-34960

GENERAL MOTORS COMPANY

(Exact Name of Registrant as Specified in its Charter)



STATE OF DELAWARE	27-0756180
(State or other jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

300 Renaissance Center, Detroit, Michigan	48265-3000
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code

(313) 556-5000

Securities registered pursuant to Section 12(b) of the Act:



Title of Each Class	Name of Each Exchange on which Registered
Common Stock	New York Stock Exchange/Toronto Stock Exchange
Warrants (expiring December 31, 2015)	New York Stock Exchange
Warrants (expiring July 10, 2016)	New York Stock Exchange
Warrants (expiring July 10, 2019)	New York Stock Exchange

Securities registered pursuant to Section 12 (g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes þ No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its company Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “small reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨

Do not check if smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No þ

The aggregate market value of the voting stock held by non-affiliates of the registrant (assuming only for purposes of this computation that directors and executive officers may be affiliates) was approximately $58.2 billion on June 30, 2014.

As of January 28, 2015 the number of shares outstanding of common stock was 1,610,365,961 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant's definitive Proxy Statement related to the Annual Stockholders Meeting to be filed subsequently are incorporated by reference into Part III of this Form 10-K.

INDEX



			Page
PART I
Item 1.	Business		1
Item 1A.	Risk Factors		13
Item 1B.	Unresolved Staff Comments		18
Item 2.	Properties		18
Item 3.	Legal Proceedings		19
Item 4.	Mine Safety Disclosures		19
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		20
Item 6.	Selected Financial Data		21
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		21
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		49
Item 8.	Financial Statements and Supplementary Data		55
	Consolidated Income Statements		55
	Consolidated Statements of Comprehensive Income		56
	Consolidated Balance Sheets		57
	Consolidated Statements of Cash Flows		58
	Consolidated Statements of Equity		59
	Notes to Consolidated Financial Statements		60
	Note 1.	Nature of Operations and Basis of Presentation	60
	Note 2.	Significant Accounting Policies	61
	Note 3.	Acquisition of Businesses	68
	Note 4.	Marketable Securities	69
	Note 5.	GM Financial Receivables, net	71
	Note 6.	Inventories	73
	Note 7.	Equipment on Operating Leases, net	73
	Note 8.	Equity in Net Assets of Nonconsolidated Affiliates	74
	Note 9.	Property, net	76
	Note 10.	Goodwill	78
	Note 11.	Intangible Assets, net	79
	Note 12.	Variable Interest Entities	80
	Note 13.	Accrued Liabilities and Other Liabilities	81
	Note 14.	Short-Term and Long-Term Debt	82
	Note 15.	Pensions and Other Postretirement Benefits	85
	Note 16.	Derivative Financial Instruments	94
	Note 17.	Commitments and Contingencies	95
	Note 18.	Income Taxes	101
	Note 19.	Restructuring and Other Initiatives	104
	Note 20.	Interest Income and Other Non-Operating Income, net	105
	Note 21.	Stockholders’ Equity and Noncontrolling Interests	106
	Note 22.	Earnings Per Share	108
	Note 23.	Stock Incentive Plans	110
	Note 24.	Supplementary Quarterly Financial Information (Unaudited)	111
	Note 25.	Segment Reporting	112



			Page
	Note 26.	Supplemental Information for the Consolidated Statements of Cash Flows	115
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		115
Item 9A.	Controls and Procedures		116
Item 9B.	Other Information		116
PART III
Item 10.	Directors, Executive Officers and Corporate Governance		117
Item 11.	Executive Compensation		117
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		117
Item 13.	Certain Relationships and Related Transactions and Director Independence		117
Item 14.	Principal Accountant Fees and Services		117
PART IV
Item 15.	Exhibits		118
Signatures			121

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GENERAL MOTORS COMPANY AND SUBSIDIARIES

PART I

Item 1. Business

General Motors Company (sometimes referred to as “we,” “our,” “us,” “ourselves,” the “Company,” “General Motors,” or “GM") was incorporated as a Delaware corporation in 2009. We design, build and sell cars, trucks and automobile parts worldwide. We also provide automotive financing services through General Motors Financial Company, Inc. (GM Financial).

Automotive

Our automotive operations meet the demands of our customers through our four automotive segments: GM North America (GMNA), GM Europe (GME), GM International Operations (GMIO) and GM South America (GMSA). Our total worldwide retail vehicle sales were 9.9 million, 9.7 million and 9.3 million including sales by joint ventures on a total vehicle basis, not based on the percentage ownership in the joint venture in the years ended December 31, 2014, 2013 and 2012.

GMNA primarily meets the demands of customers in North America with vehicles developed, manufactured and/or marketed under the Buick, Cadillac, Chevrolet and GMC brands. The demands of customers outside North America are primarily met with vehicles developed, manufactured and/or marketed under the Buick, Cadillac, Chevrolet, GMC, Holden, Opel and Vauxhall brands. We also have equity ownership stakes directly or indirectly in entities through various regional subsidiaries, primarily in Asia. These companies design, manufacture and market vehicles under the Alpheon, Baojun, Buick, Cadillac, Chevrolet, Jiefang and Wuling brands.

In addition to the products we sell to our dealers for consumer retail sales, we also sell cars and trucks to fleet customers, including daily rental car companies, commercial fleet customers, leasing companies and governments. We sell vehicles to fleet customers directly or through our network of dealers. Our retail and fleet customers can obtain a wide range of aftersale vehicle services and products through our dealer network, such as maintenance, light repairs, collision repairs, vehicle accessories and extended service warranties.

Competitive Position

The global automotive industry is highly competitive. The principal factors that determine consumer vehicle preferences in the markets in which we operate include price, quality, available options, style, safety, reliability, fuel economy and functionality. Market leadership in individual countries in which we compete varies widely.

Vehicle Sales

We present both wholesale and retail vehicle sales data to assist in the analysis of our revenue and our market share. We do not currently export vehicles to Cuba, Iran, North Korea, Sudan or Syria. Accordingly, these countries are excluded from industry sales data in the tables below and corresponding calculations of our market share.

Wholesale Vehicle Sales

Wholesale vehicle sales data, which represents sales directly to dealers and others, is the measure that correlates vehicle sales to our revenue from the sale of vehicles, which is the largest component of automotive Net sales and revenue. Wholesale vehicle sales exclude vehicles produced by unconsolidated joint ventures. In the year ended December 31, 2014, 52.9% of our wholesale vehicle sales volume was generated outside the U.S. The following table summarizes total wholesale vehicle sales of new vehicles by automotive segment (vehicles in thousands):



	Years ended December 31,
	2014			2013			2012
GMNA	3,320	55.0	%	3,276	51.1	%	3,207	49.8	%
GME	1,172	19.4	%	1,163	18.1	%	1,231	19.1	%
GMIO	655	10.9	%	921	14.4	%	957	14.8	%
GMSA	886	14.7	%	1,053	16.4	%	1,050	16.3	%
Worldwide	6,033	100.0	%	6,413	100.0	%	6,445	100.0	%

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Retail Vehicle Sales

Retail vehicle sales data, which represents estimated sales to the end customer, including fleets, does not correlate directly to the revenue we recognize during the period. However, retail vehicle sales data is indicative of the underlying demand for our vehicles, is the basis for our market share, and is based upon the good faith estimates of management. Retail vehicle sales data includes sales by joint ventures on a total vehicle basis, not based on the percentage of ownership in the joint venture. Certain joint venture agreements in China allow for the contractual right to report vehicle sales of non-GM trademarked vehicles by those joint ventures. Market share information is based primarily on retail vehicle sales volume, but estimates may be used where retail vehicle sales volume is not available.

In countries where end customer data is not readily available other data sources, such as wholesale or forecast volumes, are used to estimate retail vehicle sales. Certain fleet sales that are accounted for as operating leases are included in retail vehicle sales at the time of delivery to the daily rental car companies. The following table summarizes total industry retail sales volume, or estimated sales volume where retail sales volume is not available, of new vehicles and the related competitive position by geographic region (vehicles in thousands):



	Years Ended December 31,
	2014				2013				2012
	Industry	GM	GM as a % of Industry		Industry	GM	GM as a % of Industry		Industry	GM	GM as a % of Industry
North America
United States	16,858	2,935	17.4	%	15,894	2,786	17.5	%	14,794	2,596	17.5	%
Other	3,379	478	14.1	%	3,201	448	14.0	%	3,041	423	13.9	%
Total North America	20,237	3,413	16.9	%	19,095	3,234	16.9	%	17,835	3,019	16.9	%
Europe
Germany	3,357	237	7.1	%	3,258	242	7.4	%	3,394	254	7.5	%
United Kingdom	2,845	305	10.7	%	2,597	301	11.6	%	2,335	272	11.7	%
Russia	2,541	189	7.4	%	2,834	258	9.1	%	3,006	288	9.6	%
Other	9,988	525	5.3	%	9,715	592	6.1	%	9,878	655	6.6	%
Total Europe	18,731	1,256	6.7	%	18,404	1,393	7.6	%	18,613	1,469	7.9	%
Asia/Pacific, Middle East and Africa
China	23,861	3,540	14.8	%	22,202	3,160	14.2	%	19,394	2,836	14.6	%
Other	19,119	838	4.4	%	19,117	898	4.7	%	19,113	919	4.8	%
Total Asia/Pacific, Middle East and Africa	42,980	4,378	10.2	%	41,319	4,058	9.8	%	38,507	3,755	9.7	%
South America
Brazil	3,498	579	16.6	%	3,767	650	17.3	%	3,802	643	16.9	%
Other	1,803	299	16.6	%	2,173	387	17.8	%	2,044	408	20.0	%
Total South America	5,301	878	16.6	%	5,940	1,037	17.5	%	5,846	1,051	18.0	%
Total Worldwide	87,249	9,925	11.4	%	84,758	9,722	11.5	%	80,801	9,294	11.5	%
United States
Cars	7,688	1,085	14.1	%	7,556	1,067	14.1	%	7,174	1,031	14.4	%
Trucks	4,753	1,113	23.4	%	4,247	998	23.5	%	3,946	933	23.7	%
Crossovers	4,417	737	16.7	%	4,091	721	17.6	%	3,674	632	17.2	%
Total U.S.	16,858	2,935	17.4	%	15,894	2,786	17.5	%	14,794	2,596	17.5	%

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GENERAL MOTORS COMPANY AND SUBSIDIARIES

The following table summarizes the vehicle sales at our China joint ventures (China JVs) that are included in our retail vehicle sales (vehicles in thousands):



	Years Ended December 31,
	2014	2013	2012
SAIC General Motors Sales Co., Ltd. (SGMS)	1,710	1,515	1,331
SAIC-GM-Wuling Automobile Co., Ltd. and FAW-GM Light Duty Commercial Vehicle Co., Ltd.	1,830	1,644	1,501

In the year ended December 31, 2014 we estimate we had the largest market share in North America and South America, the number six market share in Europe and the number two market share in the Asia/Pacific, Middle East and Africa region. In the year ended December 31, 2014 the Asia/Pacific, Middle East and Africa region was our largest region by retail vehicle sales volume and represented 44.1% of our global retail vehicle sales.

Our retail vehicle sales volumes in the year ended December 31, 2014 grew at a slightly slower pace than the overall industry, resulting in a 0.1% industry share decline. All new and refreshed vehicles gained share in 2014, but were outpaced by losses on vehicles that were late in their lifecycle, largely due to an aggressive competitive environment. Our retail vehicle sales volumes in the year ended December 31, 2013 reflect continued recovery in the U.S. despite an intense competitive environment. Growth was largely attributed to new or refreshed models. Our retail vehicle sales volumes in the year ended December 31, 2012 reflect an intensified competitive environment in the U.S., including aggressive competitor pricing and media spending, as well as key competitor new product launches.

Fleet Sales and Deliveries

The sales and market share data provided previously includes both retail and fleet vehicle sales. Certain fleet transactions, particularly daily rental, are generally less profitable than retail sales. A significant portion of the sales to daily rental car companies are recorded as operating leases under U.S. GAAP with no recognition of revenue at the date of initial delivery due to guaranteed repurchase obligations. The following table summarizes estimated fleet sales and those sales as a percentage of total retail vehicle sales (vehicles in thousands):



	Years Ended December 31,
	2014		2013		2012
GMNA	814		758		775
GME	505		490		500
GMIO	414		415		408
GMSA	176		184		190
Total fleet sales	1,909		1,847		1,873

Fleet sales as a percentage of total retail vehicle sales	19.2	%	19.0	%	20.2	%

The following table summarizes U.S. fleet sales and those sales as a percentage of total U.S. retail vehicle sales (vehicles in thousands):



	Years Ended December 31,
	2014		2013		2012
Daily rental sales	450		439		431
Other fleet sales	254		217		242
Total fleet sales	704		656		673
Fleet sales as a percentage of total U.S. retail vehicle sales
Cars	29.5	%	26.4	%	30.6	%
Trucks	21.8	%	24.2	%	25.3	%
Crossovers	19.1	%	18.6	%	19.2	%
Total vehicles	24.0	%	23.6	%	25.9	%

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Product Pricing

Several methods are used to promote our products, including the use of dealer, retail and fleet incentives such as customer rebates and finance rate support. The level of incentives is dependent in large part upon the level of competition in the markets in which we operate and the level of demand for our products. In 2015 we will continue to price vehicles competitively, including offering strategic and tactical incentives as required. We believe this strategy, coupled with sound inventory management, will continue to strengthen the reputation of our brands and result in competitive prices.

Cyclical Nature of Business

Retail sales are cyclical and production varies from month to month. Vehicle model changeovers occur throughout the year as a result of new market entries. The market for vehicles depends on general economic conditions, credit availability and consumer spending.

Relationship with Dealers

We market vehicles worldwide primarily through a network of independent authorized retail dealers. These outlets include distributors, dealers and authorized sales, service and parts outlets.

The following table summarizes the number of authorized dealerships:



	December 31, 2014	December 31, 2013	December 31, 2012
GMNA	4,908	4,946	5,015
GME	6,633	7,087	7,574
GMIO	7,699	7,472	6,915
GMSA	1,272	1,201	1,250
Total worldwide	20,512	20,706	20,754

We and our joint ventures enter into a contract with each authorized dealer agreeing to sell to the dealer one or more specified product lines at wholesale prices and granting the dealer the right to sell those vehicles to retail customers from an approved location. Our dealers often offer more than one GM brand at a single dealership in a number of our markets in order to enhance dealer profitability. Authorized dealers offer parts, accessories, service and repairs for GM vehicles in the product lines that they sell using GM parts and accessories. Our dealers are authorized to service GM vehicles under our limited warranty program and those repairs are to be made only with GM parts. Our dealers generally provide their customers access to credit or lease financing, vehicle insurance and extended service contracts provided by GM Financial, Ally Financial, Inc. (Ally Financial) and other financial institutions.

The quality of GM dealerships and our relationship with our dealers and distributors are critical to our success as dealers maintain the primary sales and service interface with the end consumer of our products. In addition to the terms of our contracts with our dealers we are regulated by various country and state franchise laws that may supersede those contractual terms and impose specific regulatory requirements and standards for initiating dealer network changes, pursuing terminations for cause and other contractual matters.

Research, Product Development and Intellectual Property

Costs for research, manufacturing engineering, product engineering and design and development activities relate primarily to developing new products or services or improving existing products or services including activities related to vehicle emissions control, improved fuel economy and the safety of drivers and passengers. In the years ended December 31, 2014, 2013 and 2012 research and development expenses were $7.4 billion, $7.2 billion and $7.4 billion.

One of our priorities for research is to continue to develop and advance our alternative propulsion strategy because energy diversity and environmental leadership are critical elements of our overall business strategy. Our objective is to be the recognized industry leader in fuel efficiency through the development of a wide variety of technologies to reduce petroleum consumption.

Fuel Efficiency

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We are fully committed to improving fuel efficiency and meeting regulatory standards through a combination of strategies including: (1) extensive technology improvements to conventional powertrains; (2) increased use of smaller displacement engines and improved and advanced automatic transmissions; and (3) vehicle improvements including increased use of lighter, front-wheel drive architectures.

Alternative Fuel Vehicles

We believe alternative fuels offer the greatest near-term potential to reduce liquid petroleum consumption in the transportation sector. Leveraging experience and capability developed around these technologies in our global operations we continue to develop FlexFuel vehicles that can run on gasoline-ethanol blend fuels as well as vehicles that run on compressed natural gas (CNG) and liquefied petroleum gas (LPG).

We currently offer 13 FlexFuel vehicles in the U.S. for the 2015 model year plus an additional four models to fleet and commercial customers capable of operating on gasoline, E85 ethanol or any combination of the two. We continue to study the future role FlexFuel vehicles may play in the U.S. in light of recent regulatory developments and the rate of development of the refueling infrastructure. In Brazil a substantial majority of vehicles sold were FlexFuel vehicles capable of running on 100% ethanol blends. We also market FlexFuel vehicles in Australia, Thailand and other global markets where biofuels have emerged in the marketplace.

We produce CNG bi-fuel capable vehicles in Europe such as the Opel Zafira and in the U.S. with the Chevrolet Express and GMC Savana full-size vans (fleet and commercial customers) and the Chevrolet Silverado and GMC Sierra 2500 HD pick-up trucks (commercial and retail customers) that are capable of switching between gasoline or diesel and CNG. In addition we recently launched the CNG bi-fuel Chevrolet Impala full-size sedan to both fleet and retail markets in the U.S. We offer LPG capable vehicles globally in select markets reflecting the infrastructure, regulatory focus and natural resource availability of the markets in which they are sold.

We support the development of biodiesel blend fuels, which are alternative diesel fuels produced from renewable sources, and we provide biodiesel capabilities in other markets reflecting the availability of biodiesel blend fuels.

Hybrid, Plug-In, Extended Range and Battery Electric Vehicles

We are investing significantly in multiple technologies offering increasing levels of vehicle electrification including eAssist, plug-in hybrid, extended range and battery electric vehicles. We currently offer seven models in the U.S. featuring some form of electrification and continue to develop plug-in hybrid electric vehicle technology (PHEV) and extended range electric vehicles such as the Chevrolet Volt, Opel Ampera and Cadillac ELR. In 2014 we introduced the Cadillac ELR extended range luxury coupe and introduced a second-generation Chevrolet Volt at the 2015 North American International Auto Show. The next-generation Chevrolet Volt symbolizes our continued commitment to expansion of vehicle electrification and the development of accompanying electrification technologies including battery systems, electric motors and advanced electronic controls.

Hydrogen Fuel Cell Technology

As part of our long-term strategy to reduce petroleum consumption and greenhouse gas emissions we are committed to continuing development of our hydrogen fuel cell technology. Our Chevrolet Equinox fuel cell electric vehicle demonstration programs, such as Project Driveway, have accumulated more than 3 million miles of real-world driving by consumers, celebrities, business partners and government agencies. These programs are helping us identify consumer and infrastructure needs to understand the business case for potential production of this technology.

GM and Honda entered into a long-term agreement to co-develop a next-generation fuel cell system and hydrogen storage technologies, aiming for the 2020 timeframe. The collaboration expects to succeed by sharing expertise, economies of scale and common sourcing strategies and builds upon GM's and Honda’s strengths as leaders in hydrogen fuel cell technology.

OnStar, LLC

OnStar, LLC (OnStar) is a wholly-owned subsidiary of GM serving more than 6.8 million subscribers in the U.S., Canada, Mexico and, through a joint venture, China, with expectations to expand to Europe. OnStar is a provider of connected safety, security and mobility solutions and advanced information technology and is available on the majority of our 2015 model year vehicles. OnStar's key services include automatic crash response, stolen vehicle assistance, remote door unlock, turn-by-turn navigation, vehicle diagnostics, hands-free calling and 4G LTE wireless connectivity.

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OnStar has developed a system based on the findings of a Center for Disease Control and Prevention expert panel which allows OnStar advisors to alert first responders when a vehicle crash is likely to have caused serious injury to the occupants. OnStar also offers a mobile application to provide subscribers with up-to-date vehicle information such as oil level, tire pressure and fuel level as well as providing remote start, remote door unlock and navigation services from a mobile phone.

Product Development

Our vehicle development activities are integrated into a single global organization. This strategy builds on earlier efforts to consolidate and standardize our approach to vehicle development. We define a global architecture as a specific range of performance characteristics and dimensions supporting a common set of major underbody components and subsystems with common interfaces.

A centralized organization is responsible for many of the non-visible parts of the vehicle such as steering, suspension, the brake system, the heating, ventilation and air conditioning system and the electrical system. This team works very closely with the global architecture development teams around the world, who are responsible for components that are unique to each brand, such as exterior and interior design, tuning of the vehicle to meet the brand character requirements and final validation to meet applicable government requirements.

Intellectual Property

We generate and hold a significant number of patents in a number of countries in connection with the operation of our business. While none of these patents by itself is material to our business as a whole, these patents are very important to our operations and continued technological development. We hold a number of trademarks and service marks that are very important to our identity and recognition in the marketplace.

Raw Materials, Services and Supplies

We purchase a wide variety of raw materials, parts, supplies, energy, freight, transportation and other services from numerous suppliers for use in the manufacture of our products. The raw materials are primarily composed of steel, aluminum, resins, copper, lead and platinum group metals. We have not experienced any significant shortages of raw materials and normally do not carry substantial inventories of such raw materials in excess of levels reasonably required to meet our production requirements.

In some instances, we purchase systems, components, parts and supplies from a single source and may be at an increased risk for supply disruptions. The inability or unwillingness of these sources to supply us with parts and supplies could have a material adverse effect on our production capacity. Total purchases from our two largest suppliers have ranged from approximately 10% to 11% of our total purchases from 2012 to 2014.

Environmental and Regulatory Matters

Automotive Emissions Control

We are subject to laws and regulations that require us to control automotive emissions, including vehicle exhaust emission standards, vehicle evaporative emission standards and onboard diagnostic (OBD) system requirements. Advanced OBD systems are used to identify and diagnose problems with emission control systems. Problems detected by the OBD system may increase warranty costs and the chance for recall. Emission and OBD requirements become more challenging each year as vehicles must meet lower emission standards and new diagnostics are required and will continue to become even more stringent throughout the world.

U.S. and Canada

The U.S. federal government imposes stringent emission control requirements on vehicles sold in the U.S. and additional requirements are imposed by various state governments. Canada’s federal government vehicle criteria emission requirements are generally aligned with the U.S. federal requirements. These requirements include vehicle exhaust emission standards, vehicle evaporative emission standards and OBD system requirements. Each model year we must obtain certification for each test group that our vehicles will meet emission requirements from the U.S. Environmental Protection Agency (EPA) before we can sell vehicles in the U.S. and Canada and from the California Air Resources Board (CARB) before we can sell vehicles in California and other states that have adopted the California emissions requirements.

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While we believe all our products are in compliance with EPA and CARB certification requirements, both agencies have ongoing “in-use” evaluations of compliance for products from all manufacturers. It is possible that we or either agency could identify potential non-compliance, which could lead to some type of field action to remedy the issue. Testing includes pre-production testing of vehicles as part of certification and in-use testing of customer vehicles at specified mileages.

CARB has adopted its next round of emission requirements which phase in with the 2015 model year. These requirements include more stringent exhaust emission and evaporative emission standards including an increase in zero emission vehicles (ZEV) such as electric vehicles or hydrogen fuel cell vehicles. CARB has adopted 2018 model year and later requirements for increasing volumes of ZEVs to achieve greenhouse gas as well as criteria pollutant emission reductions to help achieve the state's long-term greenhouse gas reduction goals. The EPA has adopted similar exhaust emission and evaporative emission standards which phase in with the 2017 model year. These new requirements will also increase the time and mileage periods over which manufacturers are responsible for a vehicle's emission performance.

The Clean Air Act permits states that have areas with air quality compliance issues to adopt the California car and light-duty truck emission standards in lieu of the federal requirements. Thirteen states currently have these standards in effect and 10 of these 13 states have adopted the ZEV requirements.

Europe

Emissions are regulated by two different entities: the European Commission (EC) and the United Nations Economic Commission for Europe (UNECE). The EC imposes harmonized emission control requirements on vehicles sold in all 28 European Union (EU) Member States and other countries apply regulations under the framework of the UNECE. We must demonstrate that vehicles will meet emission requirements from an approval authority before we can sell vehicles in the EU Member States. The regulatory requirements include random testing of newly assembled vehicles and a manufacturer in-use surveillance program. EU and UNECE requirements are equivalent in terms of stringency and implementation.

A new level of exhaust emission standards for cars and light-duty trucks, Euro 5, was effective in 2011. Future European emission standards focus particularly on further reducing emissions from diesel vehicles. The Euro 6 emission levels will become effective in 2017. The new requirements will require additional technologies and further increase the cost of diesel engines, which currently cost more than gasoline engines. To comply with Euro 6 standards we expect that we will need to implement technologies identical to those being developed to meet U.S. emission standards. These technologies will put additional cost pressures on the already challenging European market for small and mid-size diesel vehicles. Gasoline engines are also affected by the new requirements. The measures for gasoline vehicles that require technology to reduce exhaust pollutant emissions will have adverse effects on vehicle fuel economy which drives additional technology cost to maintain fuel economy.

In the long-term, notwithstanding the already low vehicle emissions in Europe, the EC will continue devising regulatory requirements on the emission test cycle, real driving emission, low temperature testing, fuel evaporation and OBD. We are currently in compliance with all material components of these requirements or expect to be in compliance by the required date.

China

China has implemented European type China 4 standards nationally with European OBD requirements nationwide for all newly registered vehicles. Beijing, Shanghai and Guangzhou each required China 5 standards by the end of 2014 for newly registered vehicles. Tianjin, Hebei Province, the Pearl River and the Yangtze River delta regions are each expected to require China 5 standards prior to nationwide implementation of China 5 in 2017. The Beijing municipality is currently considering the implementation of a China unique emission standard for China 6 with the potential to combine elements of European and U.S. standards as early as 2017. We are currently in compliance with all material components of these requirements or expect to be in compliance by the required date.

Automotive Fuel Economy

U.S.

Corporate Average Fuel Economy (CAFE) reporting is required for three separate fleets: domestically produced cars, imported cars and light-duty trucks. Both car and light-duty truck standards were established using targets for various vehicle sizes and vehicle model sales volumes. In 2015 our domestic car standard is estimated to be 34.8 mpg, our import car standard is estimated

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at 38.4 mpg, and our light-duty truck standard is estimated to be 25.6 mpg. Our current product plan is expected to be compliant with the federal CAFE program through the 2015 model year. In addition to federal CAFE the U.S. EPA requires compliance with greenhouse gas requirements that are similar to the CAFE program. Our current product plan is expected to be compliant with the federal greenhouse gas program through the 2015 model year. CARB has agreed that compliance with the federal program is deemed to be compliant with the California program for the 2012 through 2016 model years.

Europe

Legislation regulating fleet average CO₂ emissions was implemented for passenger cars in 2012 with full compliance required by 2015. Requirements must be met through the introduction of CO₂ reducing technologies on conventional engines or ultra-low CO₂ vehicles such as the Chevrolet Volt and Opel Ampera. The EU has adopted an even more stringent CO₂ regulation as of 2020. Along with the passenger car target, the EU also adopted a new fleet average target as of 2020. We are developing a compliance plan by adopting operational CO₂targets for each market entry in Europe.

Effective in 2012 an EC regulation required low-rolling resistance tires, tire pressure monitoring systems and gear shift indicators. An additional EC regulation has been adopted that will require labeling of tires for noise, fuel efficiency and rolling resistance, affecting vehicles at the point of sale as well as the sale of tires in the aftermarket.

China

China has both an individual vehicle pass-fail type approval requirement based on Phase 2 standards and a fleet fuel consumption requirement based on Phase 3 standards based on vehicle curb weight for the 2012 through 2015 calendar years. Implementation began in 2012 with full compliance to 6.9L/100km required by 2015. China has continued subsidies for fuel efficient vehicles, plug-in hybrid, battery electric and fuel cell vehicles. China is now working on a more aggressive Phase 4 fleet fuel consumption standard that is expected to apply beginning in 2016, with full compliance to 5.0L/100km required by 2020.

Industrial Environmental Control

Environmental Matters

Our operations are subject to a wide range of environmental protection laws including those laws regulating air emissions, water discharges, waste management and environmental cleanup. Certain environmental statutes require that responsible parties fund remediation actions regardless of fault, legality of original disposal or ownership of a disposal site. Under certain circumstances these laws impose joint and several liability as well as liability for related damages to natural resources. Refer to Note 17 to our consolidated financial statements for additional information on environmental matters including site remediation.

To mitigate the effects our worldwide operations have on the environment we are committed to convert as many of our worldwide facilities as possible to landfill-free facilities. At December 31, 2014, 88 (or approximately 50%) of our manufacturing facilities were landfill-free facilities. Additionally we have 34 non-manufacturing facilities that are landfill free. At our landfill-free manufacturing facilities approximately 93% of waste materials are recycled or reused and 6% is converted to energy at waste-to-energy facilities. Including construction, demolition and remediation wastes, we estimate that we recycled, reused, or composted over 2 million metric tons of waste materials at our global manufacturing operations and estimate that we converted approximately 100,000 metric tons of waste materials to energy at waste-to-energy facilities in the year ended December 31, 2014.

In addition to providing environmental benefits our landfill-free program and total waste reduction commitments generate revenue from the sale of production by-products, reduce our carbon footprint, and help to reduce the risks and financial liabilities associated with waste disposal.

We continue to search for ways to increase our use of renewable energy and improve our energy efficiency. At December 31, 2014 we have implemented projects globally that have increased our renewable energy capacity by over 35 megawatts, bringing our total renewable energy capacity to over 100 megawatts. In 2014 we also met the Environmental Protection Agency Energy Star Challenge for Industry at an additional 14 of our sites globally by reducing energy intensity an average of 17%. To meet the EPA challenge industrial sites must reduce energy intensity by 10% in five years or fewer. All 14 sites achieved the goal in no more than four years, with most meeting it in less than two years, bringing the total number of GM-owned sites to have met the Energy Star Challenge to 70.

Chemical Regulations

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We continually monitor the implementation of chemical regulations to maintain compliance and evaluate their effect on our business, suppliers and the automotive industry.

U.S. and Canada

Governmental agencies in both the U.S. and Canada continue to introduce new regulations and legislation related to the selection and use of chemicals or substances of concern by mandating broad prohibitions, green chemistry, life cycle analysis and product stewardship initiatives. These initiatives give broad regulatory authority to ban or restrict the use of certain chemical substances and potentially affect automobile manufacturers' responsibilities for vehicle components at the end of a vehicle's life, as well as, chemical selection for product development and manufacturing. Chemical restrictions in Canada are progressing more rapidly than in the U.S. as a result of Environment Canada’s Chemical Management Plan to assess existing substances and implement risk management controls on any chemical deemed toxic. These emerging regulations will potentially lead to increases in costs and supply chain complexity. We are currently in compliance with all material components of these requirements or expect to be in compliance by the required date.

The U.S. Congress is currently pursuing an update of the Toxic Substances Control Act to grant the EPA more authority to regulate and ban chemicals from use in the U.S. which, if passed, is expected to greatly increase the level of regulation of chemicals in vehicles.

Europe

In 2007 the EU implemented its regulatory requirements, the EU REACH regulation among others, to register, evaluate, authorize and restrict the use of chemical substances. This regulation requires chemical substances manufactured in or imported into the EU to be registered with the European Chemicals Agency before 2018. Under this regulation, “substances of very high concern” may either require authorization for further use or may be restricted in the future. This could potentially increase the cost of certain alternative substances that are used to manufacture vehicles and parts, or result in a supply chain disruption when a substance is no longer available to meet production timelines. Our research and development initiatives may be diverted to address future requirements. We are currently in compliance with all material components of these requirements or expect to be in compliance by the required date.

Safety

In the U.S. if a vehicle or vehicle equipment does not comply with a safety standard or if a vehicle defect creates an unreasonable safety risk the manufacturer is required to notify owners and provide a remedy. We are required to report certain information relating to certain customer complaints, warranty claims, field reports and notices and claims involving property damage, injuries and fatalities in the U.S. and claims involving fatalities outside the U.S. We are also required to report certain information concerning safety recalls and other safety campaigns outside the U.S.

Outside the U.S. safety standards and recall regulations often have the same purpose as the U.S. standards but may differ in their requirements and test procedures. Other countries sometimes pass regulations which are more stringent than U.S. standards. Refer to Note 13 for more information on significant recall activities in 2014.

Vehicular Noise Control

In the U.S. passenger cars and light-duty trucks are subject to state and local motor vehicle noise regulations. We identify the most stringent state and local requirements and validate to those requirements. Medium to heavy-duty trucks are regulated at the federal level.

Outside the U.S. noise regulations have been established by authorities at the national and supranational level. We believe that our vehicles meet all applicable noise regulations in the markets where they are sold. In 2014 the EU published a directive that mandates a significant decrease in vehicle noise emissions with a mandatory application beginning in 2016. The directive of the EU also forms the basis for amendment to UNECE vehicle regulations, with the effect that maximum noise regulations will become more stringent in all markets outside of North America.

While current noise emission requirements regulate maximum allowable noise levels, formal proposals are under development to regulate minimum sound levels. These proposals stem from concern that relatively quiet vehicles, specifically hybrids and

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electrics, may not be readily heard by pedestrians. In the U.S., National Highway Transportation Safety Administration (NHTSA) issued a Notice of Proposed Rulemaking in January 2013 and the U.S. Department of Transportation indicated a final rule is expected to be published in 2015. The UNECE is developing a Global Technical Regulation, sponsored by the U.S., Japan, and the EU, for manufacturers to equip vehicles with pedestrian alerting devices where the vehicle fails to meet minimum sound emission levels.

Automotive Financing - GM Financial

GM Financial is our global captive automotive finance company. GM Financial conducts its business in North America and, as a result of the 2013 acquisition of the Ally Financial international operations, in Europe and Latin America. Latin America includes operations located in Brazil, Chile, Colombia and Mexico. In January 2015 GM Financial completed the acquisition of Ally Financial's equity interest in SAIC-GMAC Automotive Finance Company Limited (formerly known as GMAC-SAIC Automotive Finance Company Limited) (SAIC-GMAC) which conducts automotive finance and financial services operations in China.

GM Financial provides consumer lending, both loan and lease, across the credit spectrum. Additionally GM Financial offers commercial products to dealer customers that include new and used vehicle inventory financing, inventory insurance, working capital, capital improvement loans, fleet financing and storage center financing.

In North America GM Financial's consumer automobile finance programs include sub-prime lending, full credit spectrum leasing and, more recently, prime lending. The sub-prime lending program is primarily offered to consumers with FICO scores of less than 620 who have limited access to automobile financing through banks and credit unions, and is expected to sustain a higher level of credit losses than prime lending. GM Financial is currently seeking to expand its prime lending programs through our franchised dealers and anticipates that prime lending will become an increasing percentage of originations and the consumer portfolio balance over time. The leasing product is offered through our franchised dealers and primarily targets prime consumers leasing new vehicles.

Internationally GM Financial’s consumer automobile finance programs focus on financing prime quality consumers, leasing in several countries and finance-related insurance products through third parties, such as credit life, gap and extended warranty coverage.

GM Financial seeks to fund its operations in each country through local sources of funding to minimize currency and country risk. GM Financial primarily finances its loan, lease and commercial origination volume through the use of secured and unsecured credit facilities, through securitization transactions where such markets are developed and through the issuance of unsecured debt.

GM Financial retains an interest in the securitization transactions in the form of restricted cash accounts and overcollateralization, whereby more receivables are transferred to the securitization trusts than the amount of asset-backed securities issued by the securitization trusts, as well as the estimated future excess cash flows expected to be received by GM Financial over the life of the securitization. Excess cash flows result from the difference between the finance charges received from the obligors on the receivables and the interest paid to investors in the asset-backed securities net of credit losses and expenses. Excess cash flows in the securitization trusts are initially retained to fund credit enhancement requirements in order to attain specific credit ratings for the asset-backed securities issued by the securitization trusts. Once targeted credit enhancement requirements are reached and maintained excess cash flows are distributed to GM Financial.

Employees

At December 31, 2014 we employed 216,000 employees of whom 136,000 (63%) were hourly employees and 80,000 (37%) were salaried employees. At December 31, 2014, 51,000 (56%) of our U.S. employees were represented by unions, a majority of which were represented by the International Union, United Automobile, Aerospace and Agriculture Implement Workers of America (UAW). The following table summarizes worldwide employment (in thousands):

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	December 31, 2014	December 31, 2013	December 31, 2012
GMNA(a)	110	109	101
GME	37	37	40
GMIO	33	36	36
GMSA	29	31	32
GM Financial(b)	7	6	4
Total Worldwide	216	219	213

U.S. - Salaried	40	36	30
U.S. - Hourly	51	51	50

_________


(a)	Increase in GMNA employees in the year ended December 31, 2013 includes an increase of approximately 4,000 employees due to insourcing of certain information technology support functions that were previously provided by outside parties and an increase of approximately 3,000 employees due to increase in launches and ramp up in manufacturing volume.


(b)	Increase in GM Financial employees in the year ended December 31, 2013 is due to the acquisition of the Ally Financial international operations.

Executive Officers of the Registrant

As of February 4, 2015 the names and ages of our executive officers and their positions and offices with GM are as follows:

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Name (Age)	Present GM Position (Effective Date)	Positions Held During the Past Five Years if Other than Present GM Position (Effective Date)
Mary T. Barra (53)	Chief Executive Officer and Member of the Board of Directors (2014)	Executive Vice President, Global Product Development, Purchasing & Supply Chain (2013) Senior Vice President, Global Product Development (2011) Vice President, Global Human Resources (2009)
Daniel Ammann (42)	President (2014)	Executive Vice President & Chief Financial Officer (2013) Senior Vice President & Chief Financial Officer (2011) GM Vice President, Finance & Treasurer (2010) Morgan Stanley - Managing Director and Head of Industrial Investment Banking (2004)
Jaime Ardila (59)	Executive Vice President & President, South America (2013)	Vice President & President, South America (2010) President and Managing Director of GM Mercosur (2007)
Alan S. Batey (51)	Executive Vice President & President, GM North America (2014)	Senior Vice President, Global Chevrolet and Brand Chief and U. S. Sales and Marketing (2013) GM Vice President, U.S. Sales and Service, and Interim GM Chief Marketing Officer (2012) Vice President, U.S. Chevrolet Sales and Service (2010) Chairman & Managing Director, Holden, Ltd. (2009)
James B. DeLuca (53)	Executive Vice President, Global Manufacturing (2014)	Vice President, Manufacturing, GM International Operations (2013) Vice President, Quality, GM International Operations (2009)
Stefan Jacoby (56)	Executive Vice President, GM Consolidated International Operations (2013)	Volvo Car Corporation - Global Chief Executive Officer and President (2010) Volkswagen Group of America - Chief Executive Officer and President (2007)
Michael P. Millikin (66)(a)	Executive Vice President & General Counsel (2013)	Senior Vice President & General Counsel (2011) GM Vice President & General Counsel (2009)
Karl-Thomas Neumann (53)	Executive Vice President & President, GM Europe & Chairman of the Management Board of Opel Group GmbH (2013)	CEO, Opel Group GmbH & President, GM Europe (2013) Volkswagen Group China - Chief Executive Officer and President (2010) Volkswagen Group - Executive Vice President, Electromobility (2009)
Mark L. Reuss (51)	Executive Vice President, Global Product Development, Purchasing & Supply Chain (2014)	Executive Vice President & President, North America (2013) GM Vice President & President, North America (2009) GM Vice President, Global Vehicle Engineering (2009)
Charles K. Stevens, III (55)	Executive Vice President & Chief Financial Officer (2014)	Chief Financial Officer, GM North America (2010) Interim Chief Financial Officer, GM South America (2011) Executive Director, Finance, GM de Mexico (2008)
Matthew Tsien (54)	Executive Vice President & President, GM China, Inc. (2014)	GM Consolidated International Operations Vice President, Planning, Program Management, & Strategic Alliances China (2012) Executive Vice President, SAIC GM Wuling (2009)
Thomas S. Timko (46)	GM Vice President, Controller & Chief Accounting Officer (2013)	Applied Materials Inc. - Corporate Vice President, Chief Accounting Officer, and Corporate Controller (2010) Delphi Automotive Corporation - Chief Accounting Officer and Controller (2006)

__________


(a)	Retiring effective July 2015 and available for consulting services to the Company through 2015.

There are no family relationships between any of the officers named above and there is no arrangement or understanding between any of the officers named above and any other person pursuant to which he or she was selected as an officer. Each of the officers named above was elected by the Board of Directors or a committee of the Board of Directors to hold office until the next annual election of officers and until his or her successor is elected and qualified or until his or her earlier resignation or removal. The Board of Directors elects the officers immediately following each annual meeting of the stockholders and may appoint other officers between annual meetings.

Segment Reporting Data

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Operating segment data and principal geographic area data for the years ended December 31, 2014, 2013 and 2012 are summarized in Note 25 to our consolidated financial statements.

Website Access to Our Reports

Our internet website address is www.gm.com. In addition to the information about us and our subsidiaries contained in this 2014 Form 10-K information about us can be found on our website including information on our corporate governance principles. Our website and information included in or linked to our website are not part of this 2014 Form 10-K.

Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act) are available free of charge through our website as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange Commission (SEC). The public may read and copy the materials we file with the SEC at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Additionally the SEC maintains an internet site that contains reports, proxy and information statements and other information. The address of the SEC's website is www.sec.gov.

* * * * * * *

Item 1A. Risk Factors

We face a number of significant risks and uncertainties in connection with our operations. Our business, results of operations and financial condition could be materially adversely affected by the factors described below. While we describe each risk separately, some of these risks are interrelated and certain risks could trigger the applicability of other risks described below.

Our business is highly dependent on the global automobile market sales volume, which can be volatile.

Our business and financial results are highly sensitive to sales volume. A number of economic and market conditions drive changes in vehicle sales, including real estate values, levels of unemployment, the availability of credit, fluctuations in the cost of fuel, consumer confidence and global economic conditions. We cannot predict future economic and market conditions with certainty.

Our ability to maintain profitability over the long-term is dependent upon our ability to introduce new and improved vehicle models that are able to attract a sufficient number of consumers.

The automotive industry, particularly in the U.S., is very competitive with market participants routinely introducing new and improved vehicle models designed to meet consumer expectations, and in the past our competitors have been very successful in persuading customers that previously purchased our products to purchase their vehicles instead. Producing new and improved vehicle models on a basis competitive with the models introduced by our competitors and preserving our reputation for designing, building and selling safe and high quality cars that meet customer preferences is critical to our long-term profitability. We will launch a substantial number of new vehicles in 2015. A successful launch of our new vehicles is critical to our short-term profitability.

The pace of our development and introduction of new and improved vehicles depends on our ability to implement successfully improved technological innovations in design, engineering and manufacturing, which requires extensive capital investment and the ability to retain and recruit new talent. In some cases the technologies that we plan to employ, such as hydrogen fuel cells and advanced battery technology, are not yet commercially practical and depend on significant future technological advances by us and by our suppliers. There can be no assurance that our competitors and others pursuing similar technologies and other competing technologies will not acquire similar or superior technologies sooner than we do or on an exclusive basis or at a significant price advantage.

Our profitability is dependent upon the success of our higher margin vehicles and luxury brands.

While we offer a balanced and complete portfolio of small, mid-size and large cars, cross-overs, sport utility vehicles (SUVs) and trucks, we generally recognize higher profit margins on our full-size pick-up trucks and SUVs. Our success is dependent upon consumer preferences and our ability to market our higher margin vehicles.

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Our future competitiveness and ability to achieve long-term profitability depends on our ability to control our costs, which requires us to successfully implement restructuring initiatives throughout our automotive operations.

We are continuing to implement a number of cost reduction and productivity improvement initiatives in our automotive operations, including labor modifications and substantial restructuring initiatives. Our future competitiveness depends upon our continued success in implementing these initiatives throughout our automotive operations. While some of the elements of cost reduction are within our control, others, such as interest rates or return on investments, which influence our expense for pensions, depend more on external factors, and there can be no assurance that such external factors will not materially adversely affect our ability to reduce our costs. Reducing costs may prove difficult due to our focus on increasing advertising and our belief that engineering expenses necessary to improve the performance, safety and customer satisfaction of our vehicles are likely to increase.

Any disruption in our suppliers' operations could disrupt our production schedule.

Our automotive operations are dependent upon the continued ability of our suppliers to deliver the systems, components, raw materials and parts that we need to manufacture our products. Our use of “just-in-time” manufacturing processes allows us to maintain minimal inventory quantities of systems, components, raw materials and parts. As a result our ability to maintain production is dependent upon our suppliers delivering sufficient quantities of systems, components, raw materials and parts on time to meet our production schedules. In some instances we purchase systems, components, raw materials and parts from a single source and may be at an increased risk for supply disruptions. Where we experience supply disruptions, we may not be able to develop alternate sourcing quickly. Any disruption of our production schedule caused by an unexpected shortage of systems, components, raw materials or parts even for a relatively short period of time could cause us to alter production schedules or suspend production entirely.

An increase in cost of raw materials could materially harm our business.

We use various raw materials in our business including steel, aluminum, copper, platinum and palladium. The prices for these raw materials fluctuate depending on market conditions. In recent years freight charges and raw material costs increased. Substantial increases in the prices for our raw materials could reduce our profitability if we cannot recoup the increased costs through increased vehicle prices. Some of these raw materials, such as corrosion-resistant steel, are only available from a limited number of suppliers. We cannot guarantee that we will be able to maintain favorable arrangements and relationships with these suppliers. An increase in the cost or a sustained interruption in the supply or shortage of some of these raw materials, which may be caused by a deterioration of our relationships with suppliers or by events such as labor strikes, could negatively affect our net revenues and profitability to a material extent.

We operate in a highly competitive industry that has excess manufacturing capacity and attempts by our competitors to sell more vehicles could have a significant negative effect on our vehicle pricing, market share and operating results.

The global automotive industry is highly competitive and overall manufacturing capacity in the industry exceeds demand. Many manufacturers have relatively high fixed labor costs as well as significant limitations on their ability to close facilities and reduce fixed costs. Our competitors may respond to these relatively high fixed costs by attempting to sell more vehicles by adding vehicle enhancements, providing subsidized financing or leasing programs, offering marketing incentives or reducing vehicle prices. Manufacturers in lower cost countries such as China and India have emerged as competitors in key emerging markets and announced their intention of exporting their products to established markets as a bargain alternative to entry-level automobiles. These actions have had, and are expected to continue to have, a significant negative effect on our vehicle pricing, market share and operating results, and present a significant risk to our ability to enhance our revenue per vehicle.

Our competitors may be able to benefit from the cost savings offered by industry consolidation or alliances.

Designing, manufacturing and selling vehicles is capital intensive and requires substantial investments in manufacturing, machinery, research and development, product design, engineering, technology and marketing in order to meet both consumer preferences and regulatory requirements. Large original equipment manufacturers are able to benefit from economies of scale by leveraging their investments and activities on a global basis across brands and nameplates. If our competitors consolidate or enter into other strategic agreements such as alliances, they may be able to take better advantage of these economies of scale to enhance their competitiveness or liquidity position.

Our business plan contemplates that we restructure our operations in various European countries, but we may not succeed in doing so.

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We face difficult market and operating conditions in certain parts of the world that may require us to restructure, impair or rationalize these operations. In many countries across our regions we have experienced challenges in our operations and continue to strategically assess the manner in which we operate in certain countries. As we continue to assess our performance throughout the regions, additional restructuring, impairment and rationalization actions may be required and may be material. The key areas of our plan include: (1) investments in our product portfolio; (2) a revised brand strategy; and (3) reducing material, development and production costs. The success of our plan will depend on a combination of our ability to execute the actions contemplated, as well as external economic factors, which are outside of our control.

We could be materially adversely affected by a negative outcome in unusual or significant litigation, governmental investigations or other legal proceedings related to the Ignition Switch Recall.

We are subject to legal proceedings involving various issues, including product liability lawsuits, stockholder litigation and governmental investigations, including class actions related to the Ignition Switch Recall, such as a lawsuit for the alleged diminished value of vehicles affected by the Ignition Switch Recall. Refer to the "GM North America" section of Management's Discussion and Analysis of Financial Conditions and Results of Operations (MD&A) for additional information on the Ignition Switch Recall. At this point we are unable to predict the duration, scope, developments in, results of or consequences of the government's investigations. Such lawsuits and investigations could in the future result in the imposition of damages, substantial fines, civil lawsuits and criminal penalties, interruptions of business, modification of business practices, equitable remedies and other sanctions against us or our personnel as well as significant legal and other costs. Because the matters are ongoing there can be no assurance as to how the resulting consequences, if any, may impact our business, reputation, consolidated financial condition, results of operations or cash flow. We cannot currently estimate the potential liability, damages or range of potential loss as a result of the legal proceedings and governmental investigations. For a further discussion of these matters refer to Note 17 to our consolidated financial statements.

The costs and effect on our reputation of product recalls could materially adversely affect our business.

From time to time we recall our products to address performance, compliance or safety-related issues. The costs we incur in connection with these recalls typically include the cost of the part being replaced and labor to remove and replace the defective part. In addition product recalls can harm our reputation and cause us to lose customers, particularly if those recalls cause consumers to question the safety or reliability of our products. Conversely not issuing a recall or not issuing a recall on a timely basis can harm our reputation and cause us to lose customers for the same reasons as expressed above.

We are subject to extensive governmental laws, regulations and policies including safety, fuel economy, and greenhouse gas emissions, the enforcement of which or changes to existing ones, may have a significant effect on how we do business.

We are affected significantly by governmental regulations that can increase costs related to the production of our vehicles and affect our product portfolio. We anticipate that the number and extent of these regulations, and the related costs and changes to our product lineup, will increase significantly in the future. These government regulatory requirements could significantly affect our plans for global product development and may result in substantial costs, including civil or criminal penalties. They may also result in limits on the types of vehicles we sell and where we sell them, which can affect revenue.

In the U.S. automotive safety standards are regulated by the NHTSA, whose regulators require that automotive manufacturers implement safety measures such as recalls for vehicles that do not or may not comply with relevant safety standards. Due to these regulations, we could be subject to civil or criminal penalties or may incur various costs including significant costs for free repairs, if we are required to, or voluntarily decide to, implement safety measures such as a recall. For example, we are currently facing U.S. Attorney for the Southern District of New York, Congressional, SEC, Transport Canada and state investigations related to the Ignition Switch Recall.

In the U.S. vehicle fuel economy and greenhouse gas emissions are regulated under a harmonized national program administered by the NHTSA and the EPA.

We are committed to meeting or exceeding these U.S. regulatory requirements. We expect that to comply with these requirements we will be required to sell a significant volume of hybrid electric vehicles, as well as implement new technologies for conventional internal combustion engines, all at increased cost levels. There is no assurance that we will be able to produce and sell vehicles that use such technologies on a profitable basis or that our customers will purchase such vehicles in the quantities necessary for us to comply with these regulatory programs.

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If we are not able to comply with specific new requirements then we could be subject to sizeable civil penalties or have to restrict product offerings drastically to remain in compliance. Environmental liabilities for which we may be responsible are not reasonably estimable and could be substantial. Violations of safety or emissions standards could result in the recall of one or more of our products, negotiated remedial actions, possible fines or a combination of any of those items. We must also cover the cost of repairs conducted under emission defect and performance warranties which apply for specified periods of time and mileage. In turn any of these actions could have substantial adverse effects on our operations including facility idling, reduced employment, increased costs and loss of revenue.

Our defined benefit pension plans are currently underfunded and our pension funding requirements could increase significantly due to a reduction in funded status as a result of a variety of factors, including weak performance of financial markets, declining interest rates, changes in assumptions and investments that do not achieve adequate returns.

Our employee benefit plans currently hold a significant amount of equity and fixed income securities. A detailed description of the investment funds and strategies is disclosed in the "Critical Accounting Estimates" section of the MD&A and Note 15 to our consolidated financial statements, which also describes significant concentrations of risk to the plan investments.

There are additional risks due to the complexity and magnitude of our investments. Examples include implementation of significant changes in investment policy, insufficient market liquidity in particular asset classes and the inability to quickly rebalance illiquid and long-term investments.

Our future funding requirements for our U.S. defined benefit pension plans qualified with the Internal Revenue Service (IRS) depend upon the future performance of assets placed in trusts for these plans, the level of interest rates used to determine funding levels, the level of benefits provided for by the plans and any changes in government laws and regulations. Future funding requirements generally increase if the discount rate decreases or if actual asset returns are lower than expected asset returns, as other factors are held constant. Our potential funding requirements are described in Note 15 to our consolidated financial statements.

Factors which affect future funding requirements for our U.S. defined benefit plans generally affect the required funding for non-U.S. plans. Certain plans outside the U.S. do not have assets and therefore the obligation is funded as benefits are paid. If local legal authorities increase the minimum funding requirements for our non-U.S. plans, we could be required to contribute more funds.

Shortages of and volatility in the price of oil may cause shifts in consumer vehicle demand.

Volatile oil prices in recent years have tended to cause a shift in consumer demand towards smaller, more fuel-efficient vehicles, which provide lower profit margins. Any increases in the price of oil or any sustained shortage of oil, including as a result of political instability in the Middle East, South America and African nations, could weaken the demand for our higher margin full-size pick-up trucks and SUVs, which could decrease. Lower oil prices in oil producing countries could also impact our ability to sell vehicles in those countries.

We rely on GM Financial to provide financial services to our dealers and customers in a majority of the markets in which we sell vehicles. GM Financial faces a number of business, economic and financial risks that could impair its access to capital and negatively affect its business and operations and its ability to provide leasing and financing to consumers and commercial lending to our dealers to support additional sales of our vehicles.

We rely on GM Financial in North America, Europe, South America and China to support leasing and sales of our vehicles to consumers requiring vehicle financing and also to provide commercial lending to our dealers. Any reduction of GM Financial's ability to provide such financial services would negatively affect our efforts to support additional sales of our vehicles and expand our market penetration among consumers and dealers. The factors that could adversely affect GM Financial's business and operations and reduce its ability to provide financing services at competitive rates include:


•	The availability of borrowings under its credit facilities to fund its consumer and dealer finance activities;


•	Its ability to access a variety of financing sources including the asset-backed securities market and other secured and unsecured debt markets;


•	The performance of loans and leases in its portfolio, which could be materially affected by delinquencies, defaults or prepayments;

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•	Wholesale auction values of used vehicles;


•	Higher than expected vehicle return rates and the residual value performance on vehicles GM Financial leases;


•	Fluctuations in interest rates and currencies; and


•	Changes to regulation, supervision and licensing across various jurisdictions.

Our planned investment in new technology in the future is significant and may not be funded at anticipated levels and, even if funded at anticipated levels, may not result in successful vehicle applications.

We intend to invest significant capital resources to support our products and to develop new technology. In addition we plan to invest heavily in alternative fuel and advanced propulsion technologies in 2015, largely to support our planned expansion of hybrid and electric vehicles. However if our future operations do not provide us with the cash flow we anticipate, we may be forced to reduce, delay or cancel our planned investments in new technology.

In some cases the technologies that we plan to employ are not yet commercially practical and depend on significant future technological advances by us and by suppliers. There can be no assurance that advances in technology will occur in a timely or feasible way, that the funds that we have budgeted for these purposes will be adequate or that we will be able to establish our right to these technologies.

Security breaches and other disruptions to our information technology networks and systems could interfere with our operations and could compromise the confidentiality of our proprietary information.

We rely upon information technology networks and systems, including in-vehicle systems and mobile devices, some of which are managed by third-parties, to process, transmit and store electronic information, and to manage or support a variety of business processes and activities, including supply chain management, manufacturing, invoicing and collection of payments from our dealer network and from customers of GM Financial. Additionally we collect and store sensitive data, including intellectual property, proprietary business information, propriety business information of our dealers and suppliers, as well as personally identifiable information of our customers and employees, in data centers and on information technology networks. The secure operation of these information technology networks, and the processing and maintenance of this information, is critical to our business operations and strategy. Despite security measures and business continuity plans, our information technology networks and systems may be vulnerable to damage, disruptions or shutdowns due to attacks by hackers or breaches due to errors or malfeasance by employees, contractors and others who have access to our networks and systems or computer viruses. The occurrence of any of these events could compromise our networks and the information stored there could be accessed, publicly disclosed, lost or stolen. We have been the target of these types of attacks in the past with no material known impacts and future attacks are likely to occur. If successful, these types of attacks on our network or systems, including in-vehicle systems and mobile devices, or service failures could have a material adverse effect on our business and results of operations, due to, among other things, the loss of proprietary data, interruptions or delays in our business operations and damage to our reputation. In addition any such access, disclosure or other loss of information could result in legal claims or proceedings, liability or regulatory penalties under laws protecting the privacy of personal information, disrupt operations and reduce the competitive advantage we hope to derive from our investment in advanced technologies. Our insurance coverage may not be adequate to cover all the costs related to significant security attacks or disruptions resulting from such attacks.

A significant amount of our operations are conducted by joint ventures that we cannot operate solely for our benefit.

Many of our operations, primarily in China, are carried out by joint ventures such as Shanghai General Motors Co., Ltd. In joint ventures we share ownership and management of a company with one or more parties who may not have the same goals, strategies, priorities or resources as we do and may compete with us outside the joint venture. Joint ventures are intended to be operated for the equal benefit of all co-owners, rather than for our exclusive benefit. Operating a business as a joint venture often requires additional organizational formalities as well as time-consuming procedures for sharing information and making decisions. In joint ventures we are required to foster our relationships with our co-owners as well as promote the overall success of the joint venture, and if a co-owner changes or relationships deteriorate, our success in the joint venture may be materially adversely affected. The benefits from a successful joint venture are shared among the co-owners, so that we do not receive all the benefits from our successful joint ventures.

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Our business in China is subject to aggressive competition and is sensitive to economic and market conditions.

Maintaining a strong position in the Chinese market is a key component of our global growth strategy. The automotive market in China is highly competitive, with competition from many of the largest global manufacturers and numerous smaller domestic manufacturers. As the size of the Chinese market continues to increase we anticipate that additional competitors, both international and domestic, will seek to enter the Chinese market and that existing market participants will act aggressively to increase their market share. Increased competition may result in price reductions, reduced margins and our inability to gain or hold market share. In addition our business in China is sensitive to economic and market conditions that drive sales volume in China.

We could be materially adversely affected by changes or imbalances in foreign currency exchange rates and interest rates.

Given the nature of the automotive industry and global spread of our business, we have significant exposures to risks related to changes in foreign currency exchange rates and interest rates. In preparing the consolidated financial statements we translate our revenues and expenses outside the U.S. into U.S. Dollars using the average foreign currency exchange rate for the period and the assets and liabilities using the foreign currency exchange rate at the balance sheet date.

Our businesses outside the U.S. expose us to additional risks.

The majority of our vehicles are sold outside the U.S. We are pursuing growth opportunities for our business in a variety of business environments outside the U.S. Operating in a large number of different regions and countries exposes us to political, economic and other risks as well as multiple foreign regulatory requirements that are subject to change, including:


•	Economic downturns in foreign countries or geographic regions where we have significant operations, such as China;


•	Economic tensions between governments and changes in international trade and investment policies, including imposing restrictions on the repatriation of dividends, especially between the U.S. and China;


•	Changes in foreign regulations impacting our overall business model restricting our ability to buy and sell our products in those countries, especially China;


•	Differing local product preferences and product requirements, including fuel economy, vehicle emissions and safety;


•	Impact of compliance with U.S. and other foreign countries’ export controls and economic sanctions;


•	Liabilities resulting from U.S. and foreign laws and regulations, including those related to the Foreign Corrupt Practices Act and certain other anti-corruption laws;


•	Differing labor regulations and union relationships;


•	Consequences from changes in tax laws;


•	Difficulties in obtaining financing in foreign countries for local operations; and


•	Political and economic instability, natural calamities, war and terrorism.

* * * * * * *

Item 1B. Unresolved Staff Comments

None

* * * * * * *

Item 2. Properties

At December 31, 2014 we had over 100 locations in the U.S., excluding our automotive financing operations and dealerships, which are primarily for manufacturing, assembly, distribution, warehousing, engineering and testing. Leased properties are primarily composed of warehouses and administration, engineering and sales offices.

We have 15 locations in Canada and we have assembly, manufacturing, distribution, office or warehousing operations in 61 other countries, including equity interests in associated companies which perform assembly, manufacturing or distribution

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operations. The major facilities outside the U.S. and Canada, which are principally vehicle manufacturing and assembly operations, are located in:



• Argentina	• Colombia	• Indonesia	• South Africa	• Uzbekistan
• Australia	• Ecuador	• Kenya	• South Korea	• Venezuela
• Brazil	• Egypt	• Mexico	• Spain	• Vietnam
• Chile	• Germany	• Poland	• Thailand
• China	• India	• Russia	• United Kingdom

We, our subsidiaries, or associated companies in which we own an equity interest, own most of the above facilities.

GM Financial leases facilities for administration and regional credit centers. GM Financial has 46 facilities, of which 22 are located in the U.S. The major facilities outside the U.S. are located in Canada, the United Kingdom, Brazil and Spain.

* * * * * * *

Item 3. Legal Proceedings

Refer to Note 17 to our consolidated financial statements for information relating to legal proceedings.

* * * * * * *

Item 4. Mine Safety Disclosures

Not applicable

* * * * * * *

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information

Shares of our common stock have been publicly traded since November 18, 2010 when our common stock was listed and began trading on the New York Stock Exchange and the Toronto Stock Exchange. The following table summarizes the quarterly price ranges of our common stock based on high and low prices from intraday trades on the New York Stock Exchange, the principal market on which the stock is traded:



	Years Ended December 31,
	2014				2013
	High		Low		High		Low
First quarter	$	41.06	$	33.57	$	30.68	$	26.19
Second quarter	$	37.18	$	31.70	$	35.49	$	27.11
Third quarter	$	38.15	$	31.67	$	37.97	$	33.41
Fourth quarter	$	35.45	$	28.82	$	41.85	$	33.92

Holders

At January 28, 2015 we had a total of 1.6 billion issued and outstanding shares of common stock held by 420 holders of record.

Dividends

Since our formation, we had not paid any dividends on our common stock through the year ended December 31, 2013. Beginning in the first quarter of 2014 our Board of Directors declared, and we paid, quarterly dividends on common stock in the amount of $0.30 per share. It is anticipated that dividends on our common stock will continue to be declared and paid quarterly. However our payment of dividends in the future, if any, will be determined by our Board of Directors and will be paid out of funds legally available for that purpose. Our payment of dividends in the future will depend on business conditions, our financial condition, earnings, liquidity and capital requirements and other factors.

Issuer Purchases of Equity Securities

Purchases of Equity Securities for Cash

No shares of common stock were purchased for cash in the three months ended December 31, 2014.

Other Purchases of Equity Securities



	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased Under Announced Programs	Approximate Dollar Value of Shares That May Yet be Purchased Under Announced Programs
October 1, 2014 through October 31, 2014	1,886,328	$	32.68	N/A	N/A
November 1, 2014 through November 30, 2014	2,833	$	31.28	N/A	N/A
December 1, 2014 through December 31, 2014	509,219	$	32.53	N/A	N/A
Total	2,398,380	$	32.65

Shares purchased consist of (1) shares of common stock retained by us for the payment of the exercise price upon the exercise of warrants; and (2) shares of common stock delivered by employees or directors back to us for the payment of taxes resulting from issuance of common stock upon the vesting of Restricted Stock Units (RSUs) and Restricted Stock Awards relating to compensation plans. Refer to Note 23 of our consolidated financial statements for additional details on employee stock incentive plans and Note 21 of our consolidated financial statements for additional details on warrants issued.

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* * * * * * *

Item 6. Selected Financial Data

Selected financial data is summarized in the following table (dollars in millions except per share amounts):



	At and for the Years Ended December 31,
	2014		2013		2012		2011		2010
Income Statement Data:
Total net sales and revenue	$	155,929	$	155,427	$	152,256	$	150,276	$	135,592
Income from continuing operations(a)	$	4,018	$	5,331	$	6,136	$	9,287	$	6,503
Net income attributable to stockholders	$	3,949	$	5,346	$	6,188	$	9,190	$	6,172
Net income attributable to common stockholders(b)	$	2,804	$	3,770	$	4,859	$	7,585	$	4,668
Basic earnings per common share(c)	$	1.75	$	2.71	$	3.10	$	4.94	$	3.11
Diluted earnings per common share(c)	$	1.65	$	2.38	$	2.92	$	4.58	$	2.89
Dividends declared per common share	$	1.20	$	—	$	—	$	—	$	—
Balance Sheet Data:
Total assets(d)	$	177,677	$	166,344	$	149,422	$	144,603	$	138,898
Automotive notes and loans payable	$	9,410	$	7,137	$	5,172	$	5,295	$	4,630
GM Financial notes and loans payable(d)	$	37,431	$	29,046	$	10,878	$	8,538	$	7,032
Series A Preferred Stock(b)	$	—	$	3,109	$	5,536	$	5,536	$	5,536
Series B Preferred Stock(e)			$	—	$	4,855	$	4,855	$	4,855
Equity(f)	$	36,024	$	43,174	$	37,000	$	38,991	$	37,159

_________

(a)

In the year ended December 31, 2014 we recorded charges of approximately $2.9 billion in Automotive cost of sales related to recall campaigns and courtesy transportation, a catch-up adjustment of $0.9 billion recorded in the three months ended June 30, 2014 related to the change in estimate for recall campaigns and a charge of $0.4 billion related to the ignition switch recall compensation program. In the year ended December 31, 2012 we recorded Goodwill impairment charges of $27.1 billion, the reversal of deferred tax valuation allowances of $36.3 billion in the U.S. and Canada, pension settlement charges of $2.7 billion and GME long-lived asset impairment charges of $5.5 billion.

(b)

In December 2014 we redeemed all of the remaining shares of our Series A Preferred Stock for $3.9 billion, which reduced Net income attributable to common stockholders by $0.8 billion. In September 2013 we purchased 120 million shares of our Series A Preferred Stock held by the UAW Retiree Medical Benefits Trust (New VEBA) for $3.2 billion, which reduced Net income attributable to common stockholders by $0.8 billion.


(c)	In the years ended December 31, 2012 and 2011 we used the two-class method for calculating earnings per share as the Series B Preferred Stock was a participating security. Refer to Note 22 to our consolidated financial statements for additional detail.


(d)	GM Financial acquired Ally Financial's international operations in Europe and Latin America in the year ended December 31, 2013.


(e)	In December 2013 all of our Series B Preferred Stock automatically converted into 137 million shares of our common stock.


(f)	In December 2012 we purchased 200 million shares of our common stock for a total of $5.5 billion, which directly reduced stockholder's equity by $5.1 billion and we recorded a charge to earnings of $0.4 billion.

* * * * * * *

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Basis of Presentation

This MD&A should be read in conjunction with the accompanying consolidated financial statements.

In the three months ended March 31, 2014 we changed our managerial and financial reporting structure to reclassify the results of our Russian subsidiaries previously reported in our GMIO segment to our GME segment. We have retrospectively revised the segment presentation for all periods presented.

Non-GAAP Measures

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Management uses earnings before interest and taxes (EBIT)-adjusted to review the operating results of our automotive segments because it excludes interest income, interest expense and income taxes and includes certain additional adjustments. GM Financial uses income before income taxes-adjusted because management believes interest income and interest expense are part of operating results when assessing and measuring the operational and financial performance of the segment. Examples of adjustments to EBIT and GM Financial's income before income taxes include certain impairment charges related to goodwill, other long-lived assets and investments; certain gains or losses on the settlement/extinguishment of obligations; and gains or losses on the sale of non-core investments. Refer to Note 25 to our consolidated financial statements for our reconciliation of these non-GAAP measures to the most directly comparable financial measure under U.S. GAAP.

Management uses adjusted free cash flow to review the liquidity of our automotive operations. We measure adjusted free cash flow as cash flow from operations less capital expenditures adjusted for management actions, primarily related to strengthening our balance sheet, such as accrued interest on prepayments of debt and voluntary contributions to employee benefit plans. Refer to the “Liquidity” section of MD&A for our reconciliation of this non-GAAP measure to the most directly comparable financial measure under U.S. GAAP.

Management uses these non-GAAP measures in its financial and operational decision making processes, for internal reporting and as part of its forecasting and budgeting processes as they provide additional transparency of our core operations. These measures allow management to view operating trends, perform analytical comparisons and benchmark performance between periods and among geographic regions.

Our calculation of these non-GAAP measures may not be comparable to similarly titled measures of other companies due to potential differences between companies in the method of calculation. As a result the use of these non-GAAP measures has limitations and should not be considered in isolation from, or as a substitute for, related U.S. GAAP measures.

Overview

Our strategic plan includes several major initiatives that we anticipate will help us achieve 9% to 10% margins on an EBIT-adjusted basis (EBIT-adjusted margins, calculated as EBIT-adjusted divided by Net sales and revenue) by early next decade: (1) earn customers for life by developing a strong product pipeline, leading the industry in quality and safety and delivering on our commitments; (2) lead the industry in product design, with our light-weighting and mixed material body structures and in leading edge technology, including the launch of 4G LTE in China and expansion of OnStar to Europe; (3) grow our brands, particularly the Cadillac brand in the U.S. and China; (4) continue our growth in China; (5) continue our growth of GM Financial as our captive automotive financing company; and (6) deliver core operating efficiencies by institutionalizing Operational Excellence. Our financial targets include the following:

•

Expected EBIT-adjusted and EBIT-adjusted margins improving in all automotive segments in 2015 due primarily to the following anticipated trends: (1) an approximately 3% increase in global industry vehicle sales; (2) improved mix of full-size SUVs and full-size pick-up trucks; and (3) lower overall restructuring costs; partially offset by (4) higher marketing and engineering costs; and (5) unfavorable foreign currency effects;


•	Anticipated adjusted automotive free cash flow will be relatively flat in 2015 compared to 2014;


•	Forecasted consolidated EBIT-adjusted margins of 9% to 10% by the 2020s;


•	Expected EBIT-adjusted margins of 10% in GMNA in 2016, which we anticipate will be driven by product launches, disciplined pricing and a focus on fixed costs;


•	An anticipated return to profitability in GME in 2016 driven by investments in our product portfolio, a revised brand strategy and reducing material, development and production costs assuming Europe does not suffer another recession;


•	Expected continued improvement of our results in GMIO (excluding the results of our China JVs) through our emerging market product portfolio, improvements in brand strategy and dealer networks, cost structure and sourcing over the medium term;


•	Continued strong net income margins at our China JVs, with plans to invest approximately $14 billion in China through 2018 and increase vehicle sales volumes by nearly 40% by 2018;

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•	Expected continued improvement of our core operations in GMSA through product launches and material and logistics optimization, with a long-term objective of single digit EBIT-adjusted margins; and


•	An anticipated increase of GM Financial’s support of the sale of new GM vehicles around the world through a comprehensive suite of financing products, including continuing on the path towards full global captive capability.

Automotive Summary and Outlook

Our consolidated Net income decreased from $5.3 billion to $4.0 billion. Notwithstanding this decrease we had strong financial results in 2014 excluding the impact of recall campaign and courtesy transportation charges. Performance of GMNA met our expectations, while GME and GMIO outperformed our expectations. However, we experienced weaker performance in GMSA due to the challenging environment in Venezuela, Brazil and Argentina.

As more fully described in the “GM North America” section of MD&A we recorded charges of approximately $2.9 billion in Automotive cost of sales relating to recall campaigns and courtesy transportation in the year ended December 31, 2014, of which over 86% was recorded in GMNA.

In the three months ended June 30, 2014 we announced the creation of a compensation program (the Program) to compensate accident victims who died or suffered physical injury (or their families) as a result of a faulty ignition switch related to the 2.6 million vehicles recalled under the Ignition Switch Recall. Refer to the “GM North America” section of MD&A for additional information on the Ignition Switch Recall. It is important to our company that we reach everyone through this Program who has been impacted. The Program is being administered by an independent program administrator. The independent administrator has established a protocol that defines the eligibility requirements to participate in the Program. There is no cap on the amount of payments that can be made to claimants under the Program.

In the three months ended June 30, 2014 we recorded $0.4 billion in Automotive selling, general and administrative expense in Corporate which represents our best estimate of amounts that may be paid under the Program. The amount was treated as an adjustment for EBIT-adjusted reporting purposes. However, it is reasonably possible that the liability could exceed our recorded amount by approximately $0.2 billion. The most significant estimates affecting the amount recorded include the number of participants that have eligible claims related to death and physical injury, which also contemplates the severity of injury, the length of hospital stays and related compensation amounts and the number of people who actually elect to participate in the Program. Our estimate is subject to significant uncertainties, as programs of this nature are highly unusual and each eligible claim will have a unique underlying fact pattern. While we do not anticipate material changes to our current estimate, it is possible that material changes could occur if actual eligible claims and the related compensation amounts differ from this estimate. The Program accepted claims from August 1, 2014 through January 31, 2015. Payments to eligible claimants began in the fourth quarter 2014 and will continue through the first half of 2015. Accident victims (or their families) could choose not to participate in the Program and pursue litigation against us. At January 30, 2015 the Program has received 3,810 claims and the independent program administrator has determined 128 claims to be eligible for payment under the Program. Remaining claims are either under review, deficient awaiting further documentation or deemed ineligible. Based on currently available information we believe our accrual at December 31, 2014 is adequate to cover the estimated costs under the Program. At January 30, 2015 we have paid $93 million to eligible claimants under the Program. Accident victims that accept a payment under the Program agree to settle all claims against GM related to the accident.

We analyze the results of our automotive business through our four geographically-based segments:

GMNA

Automotive industry volume has continued to grow in North America. In 2014 U.S. industry light vehicle sales for the calendar year were 16.5 million units, up from 15.6 million units in 2013. In January 2015 we announced that we expect 2015 industry light vehicle sales to be between 16.5 and 17.0 million units.

In the year ended December 31, 2014 our U.S. retail vehicle sales increased at a rate approximately 0.7 percentage points less than industry sales. As a result, our U.S. market share decreased by 0.1 percentage points. U.S. market share for both Chevrolet and Cadillac decreased, while GMC and Buick increased.

GMNA continued to generate increases in average transaction prices (ATP) in U.S. According to J.D. Power PIN estimates, in the year ended December 31, 2014 we achieved record ATP in the U.S. on the strength of new products such as large pick-ups and

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SUVs. Contributing to the record ATP, our U.S. incentive spending as a percentage of ATP increased by 0.1 percentage points, while industry spending increased by 0.4 percentage points compared to the prior year.

The first deliveries of the new 2015 Chevrolet Colorado and GMC Canyon mid-size pick-ups occurred in September 2014. We have announced plans to add a third shift at our Wentzville, Mo. assembly plant in early 2015 to meet expected demand for both mid-size pick-ups and full-size vans.

Customer safety and satisfaction were the major reasons for the recall of approximately 36 million vehicles announced during 2014. These recalls included: (1) approximately 2.6 million vehicles to repair ignition switches that could result in a loss of electrical power under certain circumstances that may prevent front airbags from deploying in the event of a crash (accident victims who died or suffered physical injury associated with these vehicles (or their families) may be eligible to participate in a compensation program, as more fully described in Note 17 to our consolidated financial statements) and to fix ignition lock cylinders that could allow removal of the ignition key while the engine is running, leading to possible rollaway or crash; (2) approximately 1.9 million vehicles to replace either the power steering motor, the steering column, the power steering motor control unit or a combination of the steering column and the power steering motor control unit as the electric power steering could fail under certain circumstances; (3) approximately 1.3 million vehicles prone to non-deployment of the side impact restraints if vehicles are not serviced when the Service Air Bag warning light is illuminated; (4) approximately 2.7 million vehicles to modify the brake lamp wiring harness that could have corrosion develop due to micro-vibration; (5) approximately 1.5 million vehicles to replace front safety lap belt cables that could fatigue and separate over time; (6) approximately 1.4 million vehicles to replace the shift cable that could wear out over time resulting in mismatches of the gear position indicated by the shift lever; (7) approximately 12.1 million vehicles to rework or replace ignition keys because the ignition switch may move out of the “run” position which may impact power steering and power braking and, depending on timing of the key movement relative to the activation of the sensing algorithm of a crash event, may result in airbags not deploying; (8) approximately 1.1 million vehicles to repair a loose battery cable that could impact vehicle warning systems; (9) approximately 0.7 million vehicles to repair ignition mechanisms where the ignition key could be pulled out while the vehicle is in the run position; (10) approximately 0.6 million vehicles to replace the wave plate in all vehicles with 6T70 and 6T75 transmissions which could crack under certain circumstances; and (11) approximately 10.1 million vehicles for other matters. In the three and six months ended June 30, 2014 we recorded charges of approximately $1.1 billion and $2.4 billion primarily for the estimated costs of parts and labor to repair these vehicles and for courtesy transportation. The cost of the vehicles recalled in the six months ended December 31, 2014 were comprehended in the June 30, 2014 catch-up adjustment of $0.9 billion associated with a change in estimate for previously sold vehicles. Refer to Note 1 and Note 13 to our consolidated financial statements for more detail related to the catch-up adjustment. Total Net sales and revenue for GMNA have increased for the year ended December 31, 2014 as compared to prior year by 6.4%. It is difficult to determine the impact, if any, on current or future Net sales and revenue due to our recent recall activity. Of the approximately 36 million vehicles subject to recall, approximately 63% of the vehicles and 65% of the costs involve vehicles we no longer produce or sell. We began repairing vehicles in early April 2014 and we have produced sufficient parts to have the ability to repair all vehicles impacted by the Ignition Switch Recall. Refer to the "GM North America" section of MD&A for additional information on all of the recalls we announced in 2014.

In the year ending December 31, 2015 we expect an increase in EBIT-adjusted and EBIT-adjusted margins due primarily to: (1) a slight increase in U.S. industry vehicle sales; and (2) full year production of full-size SUVs; partially offset by (3) increased engineering and marketing costs.

The UAW contract we entered into in September 2011 expires in September 2015.

GME

The automotive industry conditions in Europe remain challenging due to economic uncertainty resulting from weak gross domestic growth, high unemployment and vehicle production overcapacity. Despite such conditions, automotive industry sales to retail and fleet customers began to improve in the three months ended December 31, 2013 compared to the corresponding period in 2012. This trend continued in 2014 with industry sales to retail and fleet customers of 19 million vehicles representing a 1.8% increase compared to the corresponding period in 2013.

Our European operations are benefiting from this trend and continue to show signs of improvement underscored by further improvement in our Opel and Vauxhall market share in the year ended December 31, 2014, which builds on our first market share increase in 14 years in 2013. This market share increase was partially driven by the success of the recently launched Opel Mokka.

We continue to implement various strategic actions to strengthen our operations and increase our competitiveness. The key actions include investments in our product portfolio including the next generation Opel Astra and Corsa, a revised brand strategy

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and reducing material, development and production costs, including restructuring activities. The success of these actions will depend on a combination of our ability to execute and external factors which are outside of our control.

We continue to assess additional strategic actions across the region as a result of significant volume pricing and foreign exchange pressures in certain markets, which may result in additional restructuring or rationalization actions. These actions, if implemented, may result in impairment and other charges. The determination of the amount of these charges is subject to significant uncertainty and highly dependent on finalization of our strategic assessments.

Our restructuring activities include our effort to rationalize our manufacturing footprint in GME whereby we reached agreement with the labor union in Germany to terminate all vehicle and transmission production at our Bochum, Germany facility at the end of 2014. Affected employees are eligible for a voluntary restructuring separation program. Restructuring charges were recorded primarily through the end of 2014. Refer to Note 19 to our consolidated financial statements for additional information.

In the year ended December 31, 2014 we performed a strategic assessment of our Russian operations as a result of a significant deterioration in sales volumes due to challenging market conditions and deterioration in the Russian Ruble. Our review indicated that the existing long-lived assets and certain investments in our Russian operations were not recoverable. As a result we recorded impairment charges of $0.2 billion in Automotive cost of sales which was treated as an adjustment for EBIT-adjusted reporting purposes. Industry and economic conditions in Russia remain volatile and we continue to evaluate and execute various strategic actions to improve our operations in a difficult environment.

We expect the European automotive industry to continue to moderately improve and we expect to be profitable in GME in 2016.

In the year ending December 31, 2015 we expect an increase in EBIT-adjusted and EBIT-adjusted margins due primarily to: (1) lower restructuring costs; partially offset by (2) higher engineering, marketing and depreciation and amortization cost.

GMIO

We are addressing many of the challenges in our GMIO operations and continue to strategically assess the manner in which we operate in certain countries within GMIO. In 2013 we announced the withdrawal of the Chevrolet brand from Western and Central Europe and the ceasing of manufacturing and significant reduction of engineering operations in Australia by 2017 and incurred impairment and other charges in 2013 and 2014. We continue to execute these plans and within the financial impact that we projected. As we continue to assess our performance throughout the region, additional restructuring and rationalization actions may be required and may be material.

In the three months ended December 31, 2014 due to a significant decrease in domestic sales driven by political unrest and a lack of consumer confidence domestically as well as ongoing weakness and trade challenges in several export markets we performed a recoverability test of our real and personal property assets in our Thailand operations. As a result we recorded impairment charges of $0.2 billion in Automotive cost of sales which was treated as an adjustment for EBIT-adjusted reporting purposes.

To address the significant industry, market share, pricing and foreign exchange pressures in the region, we continue to focus on product portfolio enhancements, manufacturing footprint rationalization, increased local sourcing of parts, cost structure reductions, as well as brand and dealer network improvements which we expect to favorably impact the region over the medium term. However, with the significant reduction in wholesale volumes and forward pricing pressures, we tested certain long-lived assets for impairment and additional testing may occur in the near term. Determining whether long-lived assets need to be tested for impairment, whether recorded amounts are recoverable and the estimate of impairment and other charges, if any, is subject to significant uncertainty and highly dependent on finalization of our strategic assessments.

In the year ending December 31, 2015 we expect an increase in EBIT-adjusted and EBIT-adjusted margins due primarily to: (1) improved profitability at our China JVs; (2) a flat to slight increase in industry vehicle sales; (3) improved product mix in the Middle East; and (4) improved cost performance; partially offset by (5) higher restructuring costs.

In China we are expecting an increase in industry vehicle sales with a modest increase in market share coupled with new vehicle launches and a full year of the 2014 launches.

GMSA

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In the three months ended March 31, 2014 we recorded devaluation charges of $0.4 billion related to a change in the exchange rate we use for remeasuring our Venezuelan subsidiaries’ non-U.S. Dollar denominated monetary assets and liabilities from the Venezuela official exchange rate to the rate determined by an auction process conducted by Venezuela’s Complementary System of Foreign Currency Administration (SICAD I). In addition to currency controls already in place the Venezuelan government announced pricing controls that, taken with other initiatives, require us to closely monitor and consider our ability to maintain a controlling financial interest in our Venezuelan subsidiaries. Refer to the "GM South America" section of MD&A for additional information.

In the year ended December 31, 2014 we recorded a net gain on extinguishment of debt of $0.2 billion primarily related to prepayment of unsecured debt in Brazil.

Based on the results of our annual goodwill impairment tests we recorded goodwill impairment charges of $0.1 billion in the year ended December 31, 2014 which was treated as an adjustment for EBIT-adjusted reporting purposes.

In the year ending December 31, 2015 we expect an increase in EBIT-adjusted and EBIT-adjusted margins due primarily to: (1) a slight improvement in market share primarily in Brazil; (2) improved product and country mix; and (3) improved pricing; partially offset by (4) higher marketing, labor, material and logistics costs. Continued foreign currency volatility will also affect our results in 2015.

Corporate

On December 31, 2014 we redeemed all of our shares of Series A Preferred Stock outstanding at a redemption price equal to the aggregate liquidation amount, including accumulated dividends, of $3.9 billion. The difference of $0.8 billion between the carrying amount and the consideration paid was recorded as a reduction to Net income attributable to common stockholders.

At December 31, 2014 our European businesses had deferred tax asset valuation allowances of $4.9 billion. As a result of the changes in our European operating structure and improving financial performance in certain jurisdictions, we are experiencing positive evidence trends in certain operations. If these operations generate profits and taxable income in the future, it is reasonably possible our conclusion regarding the need for full valuation allowances could change, resulting in the reversal of significant portions of the valuation allowances. In the quarter in which significant valuation allowances are reversed, we will record a material tax benefit reflecting the reversal, which could result in lower than expected or negative effective tax rate for both the quarter and full year.

Automotive Financing - GM Financial Summary and Outlook

GM Financial is currently seeking to expand its prime lending programs in North America and anticipates that prime lending will become an increasing percentage of the consumer portfolio balance over time. We believe that offering a comprehensive suite of financing products will generate incremental sales of our vehicles, drive incremental GM Financial earnings and help support our sales throughout economic cycles. GM Financial completed the acquisitions of Ally Financial's automotive finance and financial services businesses in Europe and Latin America during 2013. On January 2, 2015 GM Financial completed its acquisition of Ally Financial's 40% equity interest in SAIC-GMAC in China. The aggregate purchase price was approximately $1.0 billion, subject to certain post-closing adjustments. Also on January 2, 2015 GM Financial sold a 5% equity interest in SAIC-GMAC to Shanghai Automotive Group Finance Company Ltd. (SAICFC), a current shareholder of SAIC-GMAC, for proceeds of approximately $120 million, subject to certain post-closing adjustments. As a result of these transactions GM indirectly owns 45% of SAIC-GMAC.

In January 2015 we announced GM Financial will become the exclusive U.S. lease provider for Buick-GMC dealers in February 2015 and is targeting March 2015 for Cadillac dealers. U.S. lease exclusivity with Chevrolet dealers is under consideration.

In the year ending December 31, 2015 we expect income before income taxes-adjusted to remain consistent with 2014 because our near-term financial results will be impacted by additional provisions on loan losses and interest expense resulting from the growth of the business.

Consolidated Results

We review changes in our results of operations under four categories: volume, mix, price and other. Volume measures the impact of changes in wholesale vehicle volumes driven by industry volume, market share and changes in dealer stock levels. Mix measures the impact of changes to the regional portfolio due to product, model, trim, country and option penetration in current year wholesale

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vehicle volumes. Price measures the impact of changes related to Manufacturer’s Suggested Retail Price and various sales allowances. Other includes primarily: (1) material and freight; (2) costs including manufacturing, engineering, advertising, administrative and selling and policy and warranty expense; (3) foreign exchange; and (4) non-vehicle related automotive revenues and costs as well as equity income or loss from our nonconsolidated affiliates.

Total Net Sales and Revenue



	Years Ended December 31,									Variance Due To
	2014		2013		Favorable/ (Unfavorable)			%		Volume			Mix		Price		Other
	(Dollars in millions)									(Dollars in billions)
GMNA	$	101,199	$	95,099	$	6,100		6.4	%	$	1.3		$	1.2	$	3.4	$	0.3
GME	22,235		21,962		273			1.2	%	$	0.2		$	0.7	$	—	$	(0.5	)
GMIO	14,392		18,411		(4,019		)	(21.8	)%	$	(4.6	)	$	0.4	$	0.7	$	(0.4	)
GMSA	13,115		16,478		(3,363		)	(20.4	)%	$	(2.4	)	$	0.1	$	1.1	$	(2.1	)
Corporate and eliminations	151		142		9			6.3	%								$	—
Automotive	151,092		152,092		(1,000		)	(0.7	)%	$	(5.6	)	$	2.3	$	5.1	$	(2.8	)
GM Financial	4,837		3,335		1,502			45.0	%								$	1.5
Total net sales and revenue	$	155,929	$	155,427	$	502		0.3	%	$	(5.6	)	$	2.3	$	5.1	$	(1.3	)



	Years Ended December 31,									Variance Due To
	2013		2012		Favorable/ (Unfavorable)			%		Volume			Mix			Price			Other
	(Dollars in millions)									(Dollars in billions)
GMNA	$	95,099	$	89,910	$	5,189		5.8	%	$	1.7		$	1.3		$	1.9		$	0.3
GME	21,962		23,055		(1,093		)	(4.7	)%	$	(1.1	)	$	—		$	(0.2	)	$	0.2
GMIO	18,411		20,588		(2,177		)	(10.6	)%	$	(0.8	)	$	(0.2	)	$	(0.5	)	$	(0.7	)
GMSA	16,478		16,700		(222		)	(1.3	)%	$	—		$	0.6		$	0.9		$	(1.7	)
Corporate and eliminations	142		42		100			n.m.											$	0.1
Automotive	152,092		150,295		1,797			1.2	%	$	(0.2	)	$	1.7		$	2.2		$	(1.9	)
GM Financial	3,335		1,961		1,374			70.1	%										$	1.4
Total net sales and revenue	$	155,427	$	152,256	$	3,171		2.1	%	$	(0.2	)	$	1.7		$	2.2		$	(0.5	)

________

n.m. = not meaningful

Refer to the regional sections of the MD&A for additional information.

Automotive Cost of Sales



	Years Ended December 31,										Variance Due To
	2014		2013			Favorable/ (Unfavorable)			%		Volume			Mix			Other
	(Dollars in millions)										(Dollars in billions)
GMNA	$	89,371	$	81,404		$	(7,967	)	(9.8	)%	$	(0.8	)	$	(0.9	)	$	(6.2	)
GME	21,712		20,824			(888		)	(4.3	)%	$	(0.1	)	$	(0.5	)	$	(0.3	)
GMIO	14,009		17,599			3,590			20.4	%	$	3.7		$	(0.5	)	$	0.4
GMSA	12,736		15,221			2,485			16.3	%	$	1.9		$	(0.2	)	$	0.8
Corporate and eliminations	254		(123		)	(377		)	n.m.								$	(0.4	)
Total automotive cost of sales	$	138,082	$	134,925		$	(3,157	)	(2.3	)%	$	4.7		$	(2.0	)	$	(5.8	)

________

n.m. = not meaningful

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	Years Ended December 31,											Variance Due To
	2013			2012			Favorable/ (Unfavorable)			%		Volume			Mix			Other
	(Dollars in millions)											(Dollars in billions)
GMNA	$	81,404		$	79,907		$	(1,497	)	(1.9	)%	$	(1.2	)	$	(1.3	)	$	1.0
GME	20,824			26,497			5,673			21.4	%	$	1.0		$	(0.4	)	$	5.1
GMIO	17,599			18,589			990			5.3	%	$	0.6		$	(0.2	)	$	0.7
GMSA	15,221			15,299			78			0.5	%	$	(0.1	)	$	(0.4	)	$	0.5
Corporate and eliminations	(123		)	(56		)	67			119.6	%							$	0.1
Total automotive cost of sales	$	134,925		$	140,236		$	5,311		3.8	%	$	0.3		$	(2.3	)	$	7.3

The most significant element of our Automotive cost of sales is material cost which makes up approximately two-thirds of the total amount. The remaining portion includes labor costs, depreciation and amortization, engineering, and policy, product warranty and recall campaigns.

Refer to the regional sections of the MD&A for additional information on volume and mix.

In the year ended December 31, 2014 unfavorable Other was due primarily to: (1) increased recall campaign and courtesy transportation charges, including catch-up adjustments, of $3.5 billion; (2) increased material and freight cost including new launches of $2.7 billion; (3) unfavorable effect of $0.7 billion resulting from the reversal of the Korea wage litigation accrual in 2013 in GMIO; (4) restructuring charges of $0.5 billion related to the Bochum plant closing in GME; (5) increased depreciation on equipment on operating lease related to daily rental vehicles of $0.3 billion; and (6) charges related to flood damage of $0.1 billion; partially offset by (7) favorable net foreign currency effect of $1.0 billion due primarily to the weakening of the Brazilian Real, Russian Ruble, Euro and Canadian Dollar (CAD) against the U.S. Dollar; partially offset by the Venezuela Bolivar Fuerte (BsF) devaluation; and (8) favorable intangible asset amortization of $0.6 billion.

In the year ended December 31, 2013 favorable Other was due primarily to: (1) decreased impairment charges of $2.8 billion for long-lived assets and intangible assets; (2) decreased pension settlement losses of $2.5 billion in GMNA; (3) the favorable effect of $1.3 billion resulting from the reversal of the Korea wage litigation accrual in 2013 compared to accruals related to the litigation in 2012; (4) favorable net foreign currency effect of $0.9 billion due primarily to the weakening of the Brazilian Real against the U.S. Dollar; and (5) a reduction in unfavorable warranty and policy adjustments of $0.7 billion; partially offset by (6) increased material and freight costs of $0.4 billion; (7) increased costs of $0.2 billion related to parts and accessories sales; and (8) net increased manufacturing expenses of $0.1 billion due primarily to new launch costs offset by reduced depreciation and amortization.

Automotive Selling, General and Administrative Expense



	Years Ended December 31,						Year Ended 2014 vs. 2013 Change				Year Ended 2013 vs. 2012 Change
	Years Ended December 31,						Year Ended 2014 vs. 2013 Change				Year Ended 2013 vs. 2012 Change
	2014		2013		2012		Favorable/ (Unfavorable)		%		Favorable/ (Unfavorable)		%
Automotive selling, general and administrative expense	$	12,158	$	12,382	$	14,031	$	224	1.8	%	$	1,649	11.8	%

In the year ended December 31, 2014 Automotive selling, general and administrative expense decreased due primarily to: (1) decreased expenses of $0.7 billion related to the withdrawal of the Chevrolet brand from Europe, including dealer restructuring costs and intangible asset impairment charges in 2013, coupled with cost reductions in 2014; and (2) favorable advertising expense of $0.2 billion in GMNA due primarily to reduced media spend; partially offset by (3) expense related to the Ignition Switch Compensation Program of $0.4 billion; and (4) legal and other costs related to the Ignition Switch Recall of $0.4 billion.

In the year ended December 31, 2013 Automotive selling, general and administrative expense decreased due primarily to: (1) impairment charges in GME for intangibles and long-lived assets of $1.8 billion recorded in 2012; and (2) a premium paid of $0.4 billion on the common stock purchase from the UST in 2012; partially offset by (3) costs related to our plans to cease mainstream distribution of Chevrolet brand in Europe of $0.5 billion.

Income Tax Expense (Benefit)

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	Years Ended December 31,							Year Ended 2014 vs. 2013 Change				Year Ended 2013 vs. 2012 Change
	Years Ended December 31,							Year Ended 2014 vs. 2013 Change				Year Ended 2013 vs. 2012 Change
	2014		2013		2012			Favorable/ (Unfavorable)		%		Favorable/ (Unfavorable)		%
Income tax expense (benefit)	$	228	$	2,127	$	(34,831	)	$	1,899	89.3	%	$	36,958	n.m.

________

n.m. = not meaningful

In the year ended December 31, 2014 income tax expense decreased due primarily to a decrease in pre-tax income related to U.S. recall-related costs, a reduction in pre-tax losses in jurisdictions with full valuation allowances and other tax expense favorable items.

In the year ended December 31, 2013 income tax expense increased due primarily to the deferred tax asset valuation allowance reversal of $36.3 billion in the U.S. and Canada that occurred in 2012.

Refer to Note 18 to our consolidated financial statements for additional information related to our income tax expense (benefit).

GM North America



	Years Ended December 31,				Year Ended 2014 vs. 2013 Change					Variance Due To
	2014		2013		Favorable/ (Unfavorable)			%		Volume		Mix		Price		Other
	(Dollars in millions)									(Dollars in billions)
Total net sales and revenue	$	101,199	$	95,099	$	6,100		6.4	%	$	1.3	$	1.2	$	3.4	$	0.3
EBIT-adjusted	$	6,603	$	7,461	$	(858	)	(11.5	)%	$	0.4	$	0.3	$	3.4	$	(5.0	)
	(Vehicles in thousands)
Wholesale vehicle sales	3,320		3,276		44			1.3	%



	Years Ended December 31,				Year Ended 2013 vs. 2012 Change				Variance Due To
	2013		2012		Favorable/ (Unfavorable)		%		Volume		Mix		Price		Other
	(Dollars in millions)								(Dollars in billions)
Total net sales and revenue	$	95,099	$	89,910	$	5,189	5.8	%	$	1.7	$	1.3	$	1.9	$	0.3
EBIT-adjusted	$	7,461	$	6,470	$	991	15.3	%	$	0.5	$	—	$	1.9	$	(1.4	)
	(Vehicles in thousands)
Wholesale vehicle sales	3,276		3,207		69		2.2	%

GMNA Total Net Sales and Revenue

In the year ended December 31, 2014 Total net sales and revenue increased due primarily to: (1) favorable vehicle pricing related to full-size pick-ups and full-size SUVs; (2) increased wholesale volumes due to full-size pick-ups, full-size SUVs and the Chevrolet Colorado, Corvette and Malibu, partially offset by decreases of the Chevrolet Impala, Captiva and Cruze; (3) favorable mix due to full-size pick-ups, full-size SUVs and the Chevrolet Corvette and Impala; and (4) favorable Other of $0.3 billion due primarily to increased operating lease revenue related to daily rental vehicles sold with guaranteed repurchase obligations and increased parts and accessories sales, partially offset by unfavorable foreign currency effect related primarily to the weakening of the Canadian Dollar and Mexican Peso against the U.S. Dollar.

In the year ended December 31, 2013 Total net sales and revenue increased due primarily to: (1) favorable vehicle pricing related to recent vehicle launches such as the Chevrolet Silverado and GMC Sierra; (2) increased wholesale volumes due to increased industry demand and successful recent vehicle launches such as the Buick Encore, Cadillac ATS, Chevrolet Silverado and Spark and GMC Sierra; and (3) favorable vehicle mix related to improving market segments containing higher revenue vehicles including crossovers and trucks.

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GMNA EBIT-Adjusted

The most significant factors which influence GMNA's profitability are industry volume (primarily U.S. seasonally adjusted annual rate) and market share. While not as significant as industry volume and market share, another factor affecting profitability is the relative mix of vehicles (cars, trucks, crossovers) sold. Variable profit is a key indicator of product profitability. Variable profit is defined as revenue less material cost, freight, the variable component of manufacturing expense, and policy and warranty expense. Vehicles with higher selling prices generally have higher variable profit. Trucks, crossover vehicles and cars sold in the U.S. currently have a variable profit of approximately 160%, 90% and 40% respectively of our portfolio on a weighted-average basis.

In the year ended December 31, 2014 EBIT-adjusted decreased due primarily to: (1) unfavorable Other of $5.0 billion due primarily to an increase in recall campaign actions and recall related charges of $2.3 billion, increased material and freight costs including new launches of $2.8 billion, and increased engineering expense of $0.5 billion, partially offset by increased daily rental vehicles sold with guaranteed repurchase obligations and reduced advertising expenses; partially offset by (2) favorable vehicle pricing related to full-size pick-ups and full-size SUVs; (3) increased wholesale volumes due to full-size pick-ups, full-size SUVs and the Chevrolet Colorado, Corvette and Malibu, partially offset by decreases of the Chevrolet Impala, Captiva and Cruze; and (4) favorable mix due to full-size pick-ups, full-size SUVs and the Chevrolet Corvette and Impala.

In the year ended December 31, 2013 EBIT-adjusted increased due primarily to: (1) favorable vehicle pricing related to recent vehicle launches such as the Chevrolet Silverado and GMC Sierra; and (2) increased wholesale volumes due to increased industry demand and successful recent vehicle launches such as the Buick Encore, Cadillac ATS and Chevrolet Silverado; partially offset by (3) unfavorable Other of $1.4 billion due primarily to increased material and freight costs including new launches of $1.1 billion, increased manufacturing expense including new launches of $0.3 billion, increased engineering expense of $0.3 billion and increased depreciation and amortization expense of $0.2 billion, partially offset by a reduction in unfavorable warranty and policy adjustments of $0.6 billion.

Recall Campaigns

In the year ended December 31, 2014 we experienced a significant increase in the number of vehicles subject to recall in North America resulting in incremental charges for the estimated costs of parts and labor to repair these vehicles and courtesy transportation for certain recalls. There were approximately 36 million vehicles subject to recalls announced during this period. This included approximately 10 million vehicles subject to multiple recalls and reflects the results of our ongoing comprehensive safety review, additional engineering analysis and our overall commitment to customer satisfaction.

In the three months ended March 31, 2014 we announced a recall to repair ignition switches in vehicles that we are no longer producing that under certain circumstances could result in a loss of electrical power that may prevent front airbags from deploying in the event of a crash. It was originally estimated that approximately 800,000 vehicles were equipped with ignition switches needing repair. These vehicles include model years 2005–2007 Chevrolet Cobalt, 2007 Pontiac G5 and 2005–2006 Pursuit. In the three months ended December 31, 2013 we recorded approximately $40 million in Automotive cost of sales to cover the repairs as these costs were considered probable and estimable at that time. In the three months ended March 31, 2014 we expanded this recall by approximately 1.8 million additional vehicles for the same issue. These vehicles, consisting of model years 2008–2010 Chevrolet Cobalt, model years 2006–2011 HHR, model years 2008–2010 Pontiac G5, model years 2006–2010 Solstice, model years 2003–2007 Saturn ION and model years 2007–2010 Sky, were not included in the initial recall. In the three months ended March 31, 2014 we recorded approximately $90 million in Automotive cost of sales to repair these vehicles and approximately $270 million in Automotive cost of sales to provide courtesy transportation to owners of affected vehicles. These recalls, relating to ignition switches, are collectively referred to as the “Ignition Switch Recall.” Refer to Note 17 to our consolidated financial statements for litigation associated with the Ignition Switch Recall. A second repair was added to these vehicles as a result of the comprehensive review described below to fix ignition lock cylinders that could allow removal of the ignition key while the engine is running, leading to possible rollaway or crash. In the three months ended March 31, 2014 we recorded approximately $320 million in Automotive cost of sales to repair ignition lock cylinders.

In response to these developments we conducted an in-depth review of the Ignition Switch Recall and our overall recall processes. We hired a former U.S. Attorney to conduct an internal investigation of the Ignition Switch Recall and to provide recommendations to improve our recall processes. Pursuant to the investigation a report was provided to us in the three months ended June 30, 2014. The investigation report made a series of recommendations in eight major areas. We intend to act or have acted on each of the recommendations. After reviewing the investigation report, we made a number of personnel decisions. Fifteen individuals identified in the investigation report are no longer with the Company. Five additional individuals were disciplined. Prior to the receipt of the

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investigation report we began the process of adding over 100 new safety investigators and related specialists in North America alone allowing us to bolster capacity and capability in identifying potential emerging issues and conducting product investigations, launched a Speak Up for Safety program encouraging employees to report potential safety issues quickly and restructured the safety decision-making process to raise safety issues to the highest levels of the Company. These measures are in addition to our creation and appointment of a new Global Vice President of Vehicle Safety responsible for the safety development of our vehicle systems, confirmation and validation of safety performance, as well as post-sale safety activities, including recalls and the creation of a new Global Product Integrity organization within Global Product Development with the goal of executing the highest levels of safety performance across all of our vehicles.

Enhancements have also been incorporated through an ongoing process of continuous improvement into the Safety and Field Investigation process to facilitate consistency in post-decision customer actions. Improved investigative and consumer facing processes and standards are also being implemented globally to facilitate rapid and efficient sharing of information across regional teams and markets to aid decision making. Another estimated 100 technical resources have been added globally in support of the revised alignment and process.

We are also actively engaging customers and servicing vehicles affected by the Ignition Switch Recall. We notified affected customers to schedule an appointment with their dealers as replacement parts are available. We began repairing vehicles in early April using parts that have undergone end-of-line quality inspection for performance of six critical operating parameters. We have produced sufficient parts to have the ability to repair all vehicles impacted by the ignition switch and ignition cylinder recalls. Through January 30, 2015 we have repaired approximately 59% of the 2.6 million vehicles subject to recall.

As a result of the Ignition Switch Recall senior leadership initiated a comprehensive review and engineering analysis to identify any additional issues which could potentially result in safety or satisfaction concerns for our customers. As part of our normal process and as a result of these reviews we announced the following additional recall campaigns in 2014:

•

In the three months ended March 31, 2014 approximately 1.9 million vehicles were recalled to replace either the power steering motor, the steering column, the power steering motor control unit or a combination of the steering column and the power steering motor control unit as the electric power steering could fail under certain circumstances — model years 2004–2006, 2008–2009 Chevrolet Malibu, model years 2004–2006 Malibu Maxx, model years 2006–2010 HHR, model years 2005–2010 Cobalt, model years 2008–2009 Saturn Aura, model years 2003–2007 ION, model years 2007–2010 Pontiac G5, model years 2005–2006, 2008–2009 G6 and model years 2005–2006 Pursuit and G4. We recorded approximately $340 million in Automotive cost of sales to repair these vehicles.

•

In the three months ended March 31, 2014 approximately 1.3 million vehicles were recalled that are prone to non-deployment of the side impact restraints if vehicles are not serviced when the Service Air Bag warning light is illuminated — model years 2008–2013 Buick Enclave and GMC Acadia, model years 2009–2013 Chevrolet Traverse and model years 2008–2010 Saturn Outlook. We recorded approximately $185 million in Automotive cost of sales to repair these vehicles.

•

In the three months ended June 30, 2014 approximately 2.7 million vehicles were recalled to modify the brake lamp wiring harness that could have corrosion develop due to micro-vibration — model years 2004–2012 Chevrolet Malibu, model years 2004–2007 Malibu Maxx, model years 2005–2010 Pontiac G6 and model years 2007–2010 Saturn Aura. We recorded approximately $90 million in Automotive cost of sales to repair these vehicles.


•	In the three months ended June 30, 2014 approximately 1.5 million vehicles were recalled to replace front safety lap belt cables that could fatigue and separate over time — model years 2009–2014 Buick Enclave, Chevrolet Traverse, GMC Acadia and model years 2009–2010 Saturn Outlook. We recorded approximately $80 million in Automotive cost of sales to repair these vehicles.

•

In the three months ended June 30, 2014 approximately 1.4 million vehicles were recalled to replace the shift cable that could wear out over time resulting in mismatches of the gear position indicated by the shift lever — model years 2004–2008 Chevrolet Malibu, model years 2004–2007 Malibu Maxx, model years 2007-2008 Saturn Aura, model years 2013–2014 Cadillac ATS, model year 2014 CTS and model years 2005–2008 Pontiac G6. We recorded approximately $150 million in Automotive cost of sales to repair these vehicles.


•	In the three months ended June 30, 2014 approximately 12.1 million vehicles were recalled to rework or replace ignition keys because the ignition switch may move out of the “run” position which may impact power steering and power braking.

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The timing of the key movement relative to the activation of the sensing algorithm of a crash event may result in airbags not deploying — model years 2005–2009 Buick Allure and Lacrosse, model year 2004 Regal LS/GS, model years 2006–2011 Lucerne, model years 1997–2005 Chevrolet Malibu, model years 2000-2007 Monte Carlo, model years 2010–2014 Camaro, model years 2000–2014 Impala, model years 1998–2002 Oldsmobile Intrigue, model years 1999–2004 Alero, model years 1999–2005 Pontiac Grand Am, model years 2004–2008 Grand Prix, model years 2004–2006 Cadillac SRX, model years 2003–2014 CTS, model years 2000–2005 Deville and model years 2006–2011 DTS. We recorded approximately $325 million in Automotive cost of sales to repair these vehicles.

•

In the three months ended March 31, 2014 and June 30, 2014 five and 17 recalls were announced covering approximately 1.2 million and 4.0 million vehicles related to safety, customer satisfaction and other matters. We recorded approximately $70 million and $450 million in Automotive cost of sales to repair these vehicles in the three months ended March 31, 2014 and June 30, 2014. None of these announced recalls were individually significant.

In total we recorded approximately $1.3 billion and $1.1 billion for the above-described actions in the three months ended March 31, 2014 and June 30, 2014.

In the six months ended December 31, 2014 we announced the following recalls related to safety, customer satisfaction and other matters, the costs of which are comprehended in the June 30, 2014 catch-up adjustment of $874 million associated with a change in estimate for previously sold vehicles:


•	Approximately 1.1 million vehicles were recalled to repair a loose battery cable that could impact vehicle warning systems and loss of power steering assist - model years 2011-2014 Chevrolet Cruze.


•	Approximately 0.7 million vehicles were recalled to repair ignition mechanisms where the ignition key could be pulled out while the vehicle is in the run position - model years 2004-2007 Saturn Vue, model years 2005-2006 Chevrolet Equinox, model year 2006 Pontiac Torrent.


•	Approximately 0.6 million vehicles were recalled to replace the wave plate in all vehicles with 6T70 and 6T75 transmissions which could crack under certain circumstances - model years 2007-2009 GMC Acadia, Pontiac G6, Saturn Aura and Outlook, model years 2008-2009 Buick Enclave, Chevrolet Equinox and Malibu, Pontiac Torrent, Saturn Vue, model year 2009 Chevrolet Traverse.


•	Approximately 5.7 million vehicles were announced under 20 additional recalls, none of which were individually significant.

The following table summarizes the activity for customer satisfaction campaigns, safety recalls, non-compliance recalls and special coverage in GMNA, including courtesy transportation (dollars in millions):

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	2014			2013
Balance at January 1	$	761		$	851
Additions	1,333			115
Payments	(110		)	(115		)
Adjustments to prior periods	(19		)	11
Balance at March 31	1,965			862
Additions	1,151			128
Payments	(329		)	(132		)
Adjustments to prior periods	691			(8		)
Balance at June 30	3,478			850
Additions	163			51
Payments	(637		)	(130		)
Adjustments to prior periods	52			(21		)
Balance at September 30	3,056			750
Additions	133			119
Payments	(542		)	(117		)
Adjustments to prior periods	82			9
Balance at December 31	$	2,729		$	761

Adjustments to prior periods in the three months ended June 30, 2014 included: (1) a catch-up adjustment associated with a change in estimate for previously sold vehicles of $874 million; partially offset by (2) adjustments of approximately $95 million for courtesy transportation as a result of greater part availability and fewer customers utilizing courtesy transportation than originally estimated; and (3) approximately $80 million for costs originally estimated separately for ignition switches and ignition lock cylinders that are now being shipped and repaired at the same time resulting in reduced costs. Based on the per vehicle part and labor cost, number of vehicles impacted and the expected number of vehicles to be repaired we believe the amounts recorded are adequate to cover the costs of these recall campaigns.

Adjustments to prior periods in the three months ended September 30, 2014 included an additional catch-up adjustment to our change in estimate for previously sold vehicles, which was partially offset by a change in estimate on a previously announced specific recall action due to reduced costs for both parts and labor. On a net basis, recall campaign and courtesy transportation adjustments for our previously sold vehicles increased approximately $52 million in the three months ended September 30, 2014.

Adjustments to prior periods in the three months ended December 31, 2014 included an additional catch-up adjustment to our change in estimate for previously sold vehicles. On a net basis, recall campaign and courtesy transportation adjustments for our previously sold vehicles increased approximately $82 million in the three months ended December 31, 2014.

The Ignition Switch Recall has led to various governmental investigations and inquiries including a subpoena from the U.S. Attorney for the Southern District of New York, and investigations by Congress, the SEC and various state attorneys general. In addition the Ignition Switch Recall and the other recalls described above have resulted in a number of claims and lawsuits. Refer to Note 17 to our consolidated financial statements for additional information.

GM Europe

GME Total Net Sales and Revenue and EBIT (Loss)-Adjusted

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	Years Ended December 31,				Year Ended 2014 vs. 2013 Change				Variance Due To
	2014		2013		Favorable/ (Unfavorable)		%		Volume		Mix		Price		Other
	(Dollars in millions)								(Dollars in billions)
Total net sales and revenue	$	22,235	$	21,962	$	273	1.2	%	$	0.2	$	0.7	$	—	$	(0.5	)